(Reuters) - Mike’s Hard Lemonade Co, owner of one of the best known malt beverage brands in the United States, is in the early stages of exploring a sale that could value it at more than $1 billion, according to two people familiar with the matter.
The Chicago-based company has initiated a sale process that is likely to attract the interest of large beverage companies, the people said this week.
Mike’s Hard Lemonade parent, Mark Anthony Group Inc, may decide against a sale of the company based on any offers received, the sources, who declined to be identified because the matter is not public, added.
Mike’s Hard Lemonade and Mark Anthony Group did not immediately respond to requests for comment.
Founded by British Columbia winery owner Anthony von Mandl in 1999, Mike’s Hard Lemonade signature product mixes lemonade with vodka as an alternative to beer and cocktails. The company also sells alcoholic beverages in flavors such as black cherry, classic margarita, mango punch and blood orange.
Mike’s Hard Lemonade has made changes to its brand within the last two years to fight off competition from fast growing rivals like Anheuser Busch InBev SA’s (ABI.BR) Lime-A-Rita and MillerCoors LLC’s Redd’s Apple Ale.
For example, the company last year changed its packaging and rolled out flavors like Mike’s Hard Peach Lemonade and a mango lemonade flavor for its Frozen Pouches product.
The company also said last June it would sell several of its flavors in smaller 8-ounce cans to appeal to more health-conscious and on-the-go consumers.
The malt beverage category is a $1.7 billion market, according to Mike’s Hard Lemonade.
Last year, Oasis Beverages, the company of beer mogul Eugene Kashper, agreed to acquire Pabst Brewing Company, best known for its blue collar-turned-hipster favorite Pabst Blue Ribbon label, from food and drink investors Evan, Daren and Dean Metropoulos. The Pabst deal subsequently closed with Kashper as the buyer.
Reporting by Olivia Oran and Greg Roumeliotis in New York; Editing by Alan Crosby and Stephen Coates