Pyramid Breweries and Magic Hat Brewing Co. have signed a letter of intent for Magic Hat to acquire Pyramid through an all-cash tender offer.
Magic Hat will pay $2.75 for each Pyramid share. The offer represents a 56% premium over Monday’s closing price of $1.76 for shares of Pyramid, a Seattle-based beer brewer.
The closing of the proposed transaction is anticipated to occur no later than August 31.
According to a joint press release, the board of directors of Pyramid has approved the transactions contemplated by the Letter of Intent.
“The combination of these two well established, high profile craft breweries will be very complementary given our respective brand portfolios and the geographies in which we predominantly operate. Additionally, there will be a number of important benefits for Pyramid to be part of a private company versus continuing to operate as a stand alone public entity. This consolidation makes both good strategic and financial sense and is well timed, particularly as the beer industry’s competitive dynamics continue to intensify,” Pyramid CEO Scott Barnum said for the press release. “The Company will continue to have offices in Seattle, its historical home, and will seek opportunities to capitalize on the enhanced assets and capabilities of the new combined entity.”
Martin Kelly, CEO of Magic Hat said, “We have a great deal of respect for Pyramid’s brand heritage, award-winning beers and its dedicated employees, and look forward to consummating this transaction, which provides both strategic and financial benefits both to Pyramid’s and Magic Hat’s stakeholders.”
Kelly previously served as CEO at Pyramid before joining Magic Hat.