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Overheard at the Craft Brewers Conference

May 9, 2017

At the 2017 Craft Brewers Conference (CBC) in Washington, D.C. ButcherJoseph’s Ray Tarasi and Carter Smith met a number of people and organizations who were interested in exploring employee ownership. Attendees at the Craft Brewers Conference exhibited tremendous enthusiasm for the benefits that ESOPs offer to breweries and related vendors, namely:

1. Maintaining independence

2. Keeping the business local

In fact, ESOPs offer these benefits (and many more…read a previous blog) to brewers, vendors, suppliers – to any Company interested in ownership transition.

Exiting an individual shareholder / Partial owners

One of the topics raised at the CBC was the issue of exiting a business partner who no longer wished to be in the business (was looking to retire). How can you exit that shareholder in the most productive manner and at the lowest upfront cost? Identifying a potential shareholder who will buy the exact ownership percentage of a departing shareholder can be challenging – particularly under a time constraint. What if you could replace a departing/non-productive shareholder with the most productive shareholder there is (hint: the employees)?

“What if you could replace a departing/non-productive shareholder with the most productive shareholder there is?”

An ESOP transaction can be performed on a craft basis, tailored and structured to meet the circumstances of your Company’s ownership dynamics. Partial ESOP transactions that fill the gap of departing shareholders are just one of the ways ESOP transactions offer flexibility (and certainty of execution) that other transaction options don’t offer. No upfront cash is needed as the ESOP transaction can likely be financed by the departing shareholder (i.e. his equity converted to debt, and paid out over time).

What are your specific ownership questions?

David Lake and Carter Smith from ButcherJoseph will be at the California Craft Brewers Association’s Spring Conference (May 21-23) and welcome an opportunity to speak further about ESOPs.

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