Bank buys back Smuttynose Brewing for $8.25 million

The Provident Bank has bought back struggling New Hampshire craft brewery Smuttynose for US$8.25 million at a foreclosure auction held last week.

Last Friday (09/03/18) The Provident Bank put the Smuttynose brand, including its production facility in Towle Farm, Hayseed Restaurant and 13-acre estate up for auction with the aim of recouping $10 million.

After failing to gain a bid at the $10 million asking price, James R. St. Jean Auctioneers, resumed bidding at $6 million. The Provident Bank president Chuck Withee later confirmed that the bank would be buying back the brewery and fielding private offers from buyers.

Following the sale, Withee said: “We are entertaining offers right now from prospective buyers. This process allows us to get the strongest deal in place to move Smuttynose Brewing Company forward in a positive direction”.

According to Brewbound, Norman Rice, a local tech entrepreneur, has reached a verbal agreement with the bank to purchase the brewery.

Speaking to the news site, Rice’s attorney Derek Durbin confirmed the agreement: “It appears things are heading in a positive direction. It still needs to be put in writing and signed, so until then, it’s not a done deal. But verbally speaking there’s an agreement that’s been reached in principle”.

Smuttynose was founded in Hampton, New Hampshire in 1994 and employs 66 members of staff. Problems began when it invested in a new production facility in 2014 which is capable of producing 75,000 barrels per year.

In 2016, Smuttynose’s sales declined 8% to 48,000 barrels, and the auction listing at the recent sale recorded 2017’s production total at 35,000 barrels.

Smuttynose Brewing Company founders Peter Egelston and Joanne Francis said, “We are looking forward to working with The Provident Bank to keep brewing our award winning beers. For 24 years we had the privilege of creating and running a company that employs a devoted group of people and produces amazing craft beer. Looks like we are going to continue doing that for a while longer!”

Francis added: “We won’t deny it – these last months have been exceptionally emotional. But the outpouring of support and encouragement from all of our incredible staff, community, and friends, has kept our hearts full and our purpose clear. We are excited that Provident Bank is committed to a very bright future for Smuttynose”.

The Portsmouth Brewery, a brewpub in downtown Portsmouth also owned by Egelston and Francis, is not part of the sale.