Deal Story: A Deal is Brewing
Sometimes a seller has to step away from their business for reasons beyond their control. That was the case for Chris and Johnell Kolve, who needed to sell their business, Wabasha Brewing Company, due to health issues. Luckily, they were familiar with the sales process since they previously owned another business that they also sold using Calhoun Companies. This proved to be a vital factor in their success.
While the owners were looking to sell imminently, they knew that timing was not their main motivation. Instead, they needed to price the business for a premium sale in order to repay the minority and initial investors who made their business possible in the first place.
“Setting the expectations early and good communication are the key drivers to getting any deal done,” explains Chris Lappen of Calhoun Companies. “In this case, knowing that we were looking for a premium sale instead of a quick sale allowed us to provide guidance, even as unexpected situations emerged.”
In the case of Wabasha Brewing Company, that unexpected situation turned out to be a pandemic that hit the brewing industry hard. The business went to market only a few months prior to the COVID shutdowns, which ended up having a negative impact on the company’s value.
“By the time we were searching for buyers, the business did not have particularly high profitability,” explains Lappen. “But they did have a few key things in place – great staff and management, top of the line equipment, and a fantastic space. They also kept clear financial records that helped demonstrate the possibilities the business had.”
Thanks to clear expectations, the business owners were able to wait for the situation to improve and the right deal to come along, even relisting the business after a year. In the end, it was all worth the effort. The business recovered, and the right buyer, an individual with a passion for the brewing industry, emerged. The timing ended up being perfect for both parties, and Chris and Johnell received full asking price for the business and real estate.
“Don’t get discouraged in the selling process,” explains Lappen, “Finding the right buyer sometimes just takes time.”