Case studY:
wind river brewing


Selling a brewery without spilling a drop of profit

When Sean and Tamra Watts purchased a hole-in-the-wall bar and microbrewery in Pinedale Wyoming in 2009, the business, a fixture in the town for several years, was looking a little worn. The previous owner had treated it more like a hobby than a business, so the place had a “locals only” reputation, and not much to recommend it beyond the town of 1,800 residents. And when the owner died suddenly, it looked like the business would die with him.

But Sean and Tamra recognized the watering hole as a diamond in the rough. Without any experience in the beer industry, they purchased the business and real estate, and set about re-licensing the microbrewery and bar.

In the decade since, the Watts had made a number of improvements to the brewery, bar and restaurant, which they rebranded as the Wind River Brewing Company. They invested thousands of dollars in cleaning up and redecorating. They developed a classic gastropub menu for the restaurant, making it a dining destination as well as a bar. Sean, an engineer, became a self-taught brewmeister, and his microbrews went on to win several notable awards at the Great American Beer Festival. The Watts also added a licensed canning line that allowed them to sell Sean’s microbrews
throughout the state.

Most importantly, the Watts created a company culture and brand that welcomed both their neighbors, and the thousands of people passing through the small town on their way to the tourist attractions in nearby Jackson Hole and Yellowstone National Park. (The previous owner had not pursued the lucrative tourist trade.)

As word spread, business boomed, and the Wind River Brewing Company became a vital part of the Pinedale community and its economy.

Then, after years of owning and managing the Wind River Brewing Company, the Watts decided that they were ready to move on. They wanted more time to focus on the two other companies they owned, and they wanted to travel.

The couple soon realized that even though they were experienced business owners, had no idea how to move forward. “We didn’t know what the Wind River Brewing Company was worth after all our improvements,” Tamra noted. “We didn’t know how to find a buyer without the whole town learning that the business was for sale. We were worried that staff could jump ship, or we could lose our loyal local clientele, if anyone learned the company was on the market.”

They lost sleep over the legal, licensing and tax issues that come with operating a business that manufactures, cans and sells alcohol.

How could they stay compliant with local and state regulations?

How would they handle the BATF, TTB, and other federal regulators during the sale?

And finally, to further complicate an already-complex situation, the business and the real estate were owned by two different business entities.

The Watts were justifiably concerned that this had profound tax and estate-planning implications.

“There were just so many moving parts,” Sean added. “We knew that if we screwed up any one of these aspects of the deal, either we
would suffer or the business would. With it being an alcohol-related business, the regulations are intense. We just couldn’t risk listing with someone who didn’t know what they were doing. A commercial real estate agent or traditional business broker didn’t seem like the right way to go, once you added the complication of alcohol to the mix.”

Luckily, Sean’s brewing consultant knew Ben Brickweg at Sagewood Advisors, and knew that Ben had helped sell other businesses in the industry. The couple reached out to Sagewood for help.

Ben and his team met with the Watts to assess their business. Unlike a traditional brokerage, Sagewood didn’t simply list the
business right away and hope for the best. The Watts got a detailed valuation first.

Then, Sagewood’s assessment group analyzed the company’s financials, and talked about various exit strategies. They discussed legal, tax, estate, and succession issues. Finally, Ben gave them a
list of to-dos that would make the business even more attractive to buyers and make the process of selling the business easier.

Once the Watts had the business ready to sell, Sagewood put together a detailed pitch book for prospective buyers and started confidentially advertising the business. Sagewood’s team screened buyers, got NDAs signed, and worked out what to disclose, how much to disclose, and in what order.

While still maintaining confidentiality, Sagewood’s transaction team brought the eventual buyers and the sellers to a meeting of
the minds in a collaborative, rather than a competitive, discovery process. With both parties agreeing on price and terms, Ben quarterbacked a sale process that maintained the value of the business assets and the loyalty of the staff and clientele.

“The reality is that the valuation of the Wind River Brewery Company that Ben gave us was based on the business’s ability to continue to operate without any visible changes or disruptions after it changed hands. Sagewood’s diligence in maintaining confidentiality was outstanding. In fact, the business was bought by a group of Pinedale business owners—neighbors—and nobody else in town knew that until the closing,” said Tamra.

“Ben and his team expertly handled every aspect of the sale,” added Sean. “They put together the deal, the Letter of Intent, handled objections, did the inventory and facility tour, handled the transfer of intellectual property and all the various licenses…they did the final proration, and Ben was even at the closing table to make sure there were no last-minute hiccups.

“If you have an alcohol-related business to sell, you must work with an expert like Ben Brickweg at Sagewood Advisors …. you’d be a fool not to,” said Tamra.