July 23, 2015 / 8:56 PM / 4 years ago

U.S. craft brewery company SweetWater prepares for IPO: sources

(Reuters) - SweetWater Brewing Company, which brews beers including 420 Extra Pale Ale, Take Two Pils, Hop Hash and Georgia Brown, is making preparations for an initial public offering (IPO), according to people familiar with the matter.

Were SweetWater to proceed with its IPO plans, it would join Boston Beer Co Inc (SAM.N), maker of Sam Adams, and Craft Brew Alliance Inc (BREW.O), as one of the few publicly listed craft beer companies in the United States.

SweetWater, backed by private equity firm TSG Consumer Partners, is in talks with investment banks about a stock market flotation that could come later this year and value the company in the hundreds of millions of dollars, the people said this week.

The sources asked not to be identified because the deliberations are confidential. SweetWater and TSG declined to comment.

In 2014, the $19.7 billion U.S. craft beer industry saw 22 percent revenue growth, according to the Brewers Association. This growth can be explained in part by innovation: Brewers are creating new beer styles, prompting some consumers to buy beer as they do wine, according to consulting firm Kurt Salmon.

While the craft beer segment still only comprises 11 percent of overall beer industry sales, its market share has more than doubled since 2010. 

The industry has become so large that members of Congress this year sought to pass a law limiting the size of companies that could call themselves craft brewers.

Founded in 1997 by former University of Colorado roommates Freddy Bensch and Kevin McNerney, SweetWater sold approximately 190,000 barrels in 2014, a 24 percent increase from 2013, according to market data.

Atlanta, Georgia-based SweetWater received a minority investment from TSG last year. Earlier this month, it hired Molson Coors Brewing Co (TAP.N) executive Bill Waters as its chief financial officer and promoted Kim Jones, a former Coca-Cola Co (KO.N) executive, to chief executive.

Reporting by Lauren Hirsch in New York; Editing by Cynthia Osterman

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