New Belgium announced today that co-founder and CEO Kim Jordan and her family have sold their controlling interest in the brewery to its employees via its Employee Stock Ownership Program (ESOP). The ESOP already owned 41 percent of the company. There was no disclosure of how much money Jordan and her family gained from the sale.
New Belgium’s executive team will continue to operate in its current form and Jordan will remain as CEO of New Belgium, a position she plans to hold “for the long-term,” according to a statement released by the company.
“We have always had a high involvement ownership culture and this allows us to take that to the next logical level,” Jordan said. “It will provide an elegant succession framework that keeps the executive team intact ensuring our vision stays true going forward.”
New Belgium was advised by investment bank Eureka Capital Markets, which specializes in ESOP transactions. On its website, Eureka notes that “an ESOP is a powerful and flexible business succession tool that enables shareholders of closely held companies to achieve liquidity while transferring stock to management and employees in a very tax efficient manner.”
The transition in ownership comes as New Belgium is in the midst of building a new brewing facility in Ashville, NC with plans to expand its distribution footprint following the launch in 2015.
Jordan spoke about the expansion plans at Brewbound Session Winter 12, and in what appeared to be a frank assessment about the sales and profitability of the Fort Collins, Colo.-based company – and her lack of interest in a private equity sale or outright acquisition of the brewery – she indicated that further financial gain was not her chief motivation for opening the new facility. Instead, Jordan explained that the primary impetus for continued expansion of New Belgium was her desire to offer employees new opportunities for professional growth, particularly in terms of opening up new markets for the brand.
Here is the brewery’s statement regarding the private sale:
New Belgium Brewing Becomes 100% Employee-Owned Company
ESOP Purchases Remainder of Founder’s Shares as Company Looks to Future
FORT COLLINS, CO - New Belgium Brewing is excited to announce that the company’s Employee Stock Ownership Program (ESOP) has purchased the balance of company shares, making it 100% employee-owned. New Belgium, brewer of a wide variety of award-winning beers including Fat Tire Amber Ale, has been a partial ESOP since 2000 with a controlling interest held by co-founder Kim Jordan and her family. This transition will put the company on a path to control their destiny into the foreseeable future.
“There are few times in life where you get to make choices that will have multi-generational impact — this is one of those times. We have an opportunity to write the next chapter of this incredible story and we’re really excited about that,” said New Belgium CEO and co-founder, Kim Jordan. “We have always had a high involvement ownership culture and this allows us to take that to the next logical level. It will provide an elegant succession framework that keeps the executive team intact ensuring our vision stays true going forward.”
Jordan plans to remain CEO for the long-term and the executive team at New Belgium will continue in its current form. The Fort Collins brewer is currently building a second facility in Asheville, North Carolina that will begin beer production in 2015. More than 150 additional hires are expected by full build out in Asheville.
New Belgium was advised by Eureka Capital Markets, a middle market investment-banking firm with expertise in both the food & beverage sector and ESOP transactions, which assisted in structuring and completing the second stage ESOP buyout transaction.
“It was an honor to work with a craft brewing leader like New Belgium and help them transition the ownership of the business to its tight culture of employee owners,” said Michael Harden, Managing Director. “Given all of the consolidation occurring in the craft brew sector, we expect that many other craft brewers will investigate how using an ESOP might help them achieve their transition goals while enabling them to remain independent companies.”
The Fort Collins brewer is currently building a second facility in Asheville, North Carolina that will begin beer production in 2015. The transition to 100% ownership will enable New Belgium to include their future co-workers in Asheville, NC in the plan and will drive an even deeper commitment to progressive business practices for the company. More than 150 additional hires are expected by full build out in Asheville.
The deal was completed on the 28th of December with a companywide announcement made during New Belgium’s annual winter retreat on the 14th of January. All 456 employee-owners were present for the celebration. Prior to this deal, New Belgium co-workers held 41% of the company’s shares.
About New Belgium Brewing Company:
New Belgium Brewing Company, makers of Fat Tire Amber Ale and a host of Belgian-inspired beers, began operations in a tiny Fort Collins basement in 1991. Today, the third largest craft brewer in the U.S., New Belgium produces nine year-round beers; Fat Tire Amber Ale, Sunshine Wheat, Blue Paddle Pilsner, 1554 Black Ale, Abbey, Ranger, Belgo IPA, Shift Pale Lager and Trippel, as well as a host of seasonal releases. In addition to producing world-class beers, New Belgium takes pride in being a responsible corporate role model with progressive programs such as employee ownership, open book management and a commitment to environmental stewardship. For more information, visit www.newbelgium.com.