A Perfect Pour: Why Boulevard’s Decision To Sell Looks PerfectSubmitted by Castlebar Asset Management on October 23rd, 2013
When Boulevard Brewery founder, John McDonald, sold his ownership stake in the iconic Kansas City company to Duvel Moortgat from Belgium the reaction around town surprised me. The immediate response almost seemed like Boulevard was packing up shop and leaving town like the Baltimore Colts. It looks like this will be anything but the case.
My initial reaction after reading the news was that Jim had done a prudent legacy-planning move for his family. The more I thought about it the more it looks like a brilliant decision. For business owners there is rarely an ideal time to sell something that you have poured your heart and soul into for a generation like John has. It is never an easy decision to sell something you built from scratch. When I saw his reasons for selling and the timing it made perfect sense. Jim’s children are too young to take over the business and he wanted to look after his family’s long-term financial interest. There is no better time to sell a craft brewery and he still gets to see Boulevard expand in its hometown.
Selling a brewery is not like shares in Apple where there are a plethora of buyers in the market. When a buyer steps up and they share similar values about your business it makes sense to listen. The craft brewing business is at an all time high in terms of its interest. This corner of the beer market grew 15% last year while overall beer sales only grew 0.9%. In terms of timing the value on a business, Boulevard is worth the most it has ever been. John is not selling his baby at the bottom of the market. Duvel has indicated that they are going to expand the breweryand keep the 100+ employees working in KC.
John is selling the business on his timetable. He was not forced to sell Boulevard because he is too old to run it, because of health issues or because a larger competitor is squeezing him out of the market. This is the best case scenario for so many business owners. They are able to sell on their own terms, at a great price and to a buyer who shares their vision.
It is never easy to sell a great business but this looks like a brilliant move. John’s family is looked after, his business is in good hands and Boulevard’s legacy in Kansas City will continue on for future generations.
Disclaimer: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.