Iron Hill gets private-equity investment to expand through Mid-Atlantic

Iron Hill Brewery & Restaurant is teaming with a Greenwich, Conn.-based private-equity firm to expand the brewpub's regional footprint, making it the latest Philadelphia-area food and beverage chain to get a boost from a deep-pocketed benefactor with a broad geographic scope.

Iron Hill received the investment from A&M Capital Opportunities to support the Wilmington-based chain's expansion into new Mid-Atlantic markets, the companies said in a statement Thursday.

The investment from AMCO puts Iron Hill on a footing with La Colombe Torrefaction Inc. coffee roasters and Honeygrow fast-casual eateries in tapping private investment to take a locally developed concept to broader markets.

"It allows us to grow the company in a way we feel comfortable with," Iron Hill cofounder Kevin Finn said in an interview Thursday. "We focus on all areas of running a great brewery restaurant, and I think that's what's made us successful."

Finn declined to disclose the amount of the investment.

Iron Hill has won 44 medals at the Great American Beer Festival, a yearly event hosted by the Brewers Association trade group in Denver, and has been named a "World Champion Brewpub" three times at the biyearly World Beer Cup international competition, according to the companies' statement.

Twenty-year-old Iron Hill has 11 locations in Delaware and Southeastern Pennsylvania, with a 12th scheduled for Huntingdon Valley this summer. It now hopes to double in size over the next three to five years as it extends its reach from North Carolina to New England, Finn said, adding that the initial expansion will take it into New Jersey and Maryland.

"The Iron Hill brand is uniquely positioned to appeal to a very broad customer base," AMCO cofounder and managing director Drew Baird said in the statement. "We plan to expand so even more communities have the opportunity to experience all that Iron Hill has to offer."

AMCO is associated with Alvarez & Marsal Holdings L.L.C., the New York-based consulting firm best known for its role in running Lehman Bros. after the investment bank's collapse in 2008. AMCO partners with owners of mid-sized companies to finance and advise expansions, focusing on consumer and retail, light industrial, business service, and health-care firms.

Baird and fellow AMCO cofounder Paul Lattanzio will join Iron Hill's board of directors.

Sheryl Winston-Smith, a management and entrepreneurship professor at Temple University's Fox School of Business, said the Philadelphia area's competitive restaurant market weeds out chains with little hope of expansion, but rewards the ones that are strong enough to grow.

That has made this region a prime hunting ground for investors looking for growth opportunities among food and beverage businesses, she said.

La Colombe funded an expansion with a $28.5 million investment in 2014 from New York-based Goode Partners, though their position was later bought out by Chobani L.L.C. yogurt company founder Hamdi Ulukaya.

Honeygrow, meanwhile, has been working on new locations since securing $25 million in financing from Miller Investment Management last year.

Other local food and beverage companies set to expand with the financial help of bigger companies include the Vetri Family group of Italian restaurants, which was acquired last year by Urban Outfitters Inc., and Downingtown-based Victory Brewing Co., which this week came under the umbrella of Ulysses Management of New York. Victory's beer sells at retail outlets, but the company, like Iron Hill, also operates brewpubs.

"At a certain point, it becomes very hard to scale without substantially more investment capital," Winston-Smith said. "I think that's where you get this interest from private equity."

jadelman@phillynews.com

215-854-2615@jacobadelman