Black Sheep Brewery sale into private ownership was pre-pack administration deal

The Yorkshire Post has confirmed the sale of the business was done as a pre-pack administration – a process that effectively allows businesses to continue trading seamlessly as before with the same name but can cause controversy because of its impact on creditors owed money.

A formal report to creditors detailing the transaction and what the outcome will be for those owed money is yet to be issued.

The change in ownership will also see the company change structure from being a public listed company to a private limited company.

The Masham-based firm, which owed millions in Government-backed Covid loans, announced earlier this month that its board had resolved to file a notice of intention to appoint administrators after attempts to sell its share capital failed. It followed the company being hit by a “perfect storm” of the pandemic hitting sales combined with rapidly rising costs from inflation.

A spokesperson for the new Black Sheep Brewing Company said: “We are pleased to announce that Black Sheep Brewery has been acquired by the Breal Group and has become Black Sheep Brewing Company Limited, trading as Black Sheep Brewery.

“This marks the next chapter in the history of Black Sheep as we look to grow the business in a sustainable way.

“Our team will continue to produce great beers from our landmark brewery in Masham, North Yorkshire and we look forward to welcoming bank holiday customers and tourists to all our retail sites this weekend.

"Breal has a proven track record of successfully transforming and growing the businesses it acquires through the private capital, operational resources, and strategic expertise it brings and we look forward to working closely with the team.”

Black Sheep, which was founded in 1992 by Paul Theakston, also runs pubs in Leeds and York.

The company’s last accounts for the year ending March 2022 recorded a £900,000 loss.

In August 2020, it took out a £3.125m Coronavirus Business Interruption Loan Scheme and in July 2022, took out a further £1.6m from the Recovery Loan Scheme initiative. Both were in the process of being repaid over several years.

Chief executive Charlene Lyons told the BBC earlier this month: “We’ve got a lot of debt in the business. When Covid happened, we took on a lot of debt, we took advantage of the CBILS loan and the RLS loan. £4m needs repaying. That’s very difficult when sales perhaps in some cases haven’t recovered since Covid, costs have increased quite significantly across the board and we haven’t had the available cash to do the things we really want to do with our customers which will then in turn grow sales.

"Our balance sheet isn’t particularly healthy but with a bit of a rebase and a restructure we can get to that place.”

The administration was overseen by Teneo Financial Advisory, which said more than 100 parties had been approached during the accelerated sales process.

Claire Boardman, senior managing director, said: “This complex and fast-paced transaction sees the continuation of a popular Yorkshire brand that punches well above its weight in a competitive market and provides important employment to the local area.

"With a right-sized funding package and a renewed focus on delivering the basics, Black Sheep has an opportunity to capitalise on its strong national following, which was evidenced by the ongoing support for the company from customers, suppliers and government.”