The private equity firm TSG invested £213 million into BrewDog, split as follows:
£110 million to buy preferred shares from the founders. This represented a financial gain for James Watt and Martin Dickie
£102 million of new capital into BrewDog via more preference shares and warrants. The investment allowed Brewdog to raise more capital. Before the TSG deal they had raised £26m, after the deal they raised £67m
TSG’s have 22.3% stake in the company, valuing BrewDog at £895 million. But the shares TSG acquired weren’t ordinary equity, they came with an 18% compounding return, one of the most aggressive quasi-equity terms ever seen. This compounding appreciation is described as ‘remorseless
In 2025 TSG’s original £213 million has now compounded to over £800 million, giving it first priority in any sale, IPO, or distribution. That’smore than the likely value of the company today, circa £500 million.
That means that the stakes held by Watt and Dickie, by equity for punks and shareholders and staff shares are likely to be worthless.
However for TSG to recover their investment, in effect a debt, a sale has to take place. They however do not own a majority share, and would need to persuade other significant share holders to back them, even though they would probably get no financial benefit
There could be trouble ahead
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