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Home Brew Forums > Home Brewing Community > General Chit Chat > Jake Keeler and Michael Dawson Leave Northern Brewer
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Old 01-13-2013, 08:38 PM   #41
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My guess would be that it all has something to do with this Private Equity firm from Philadelphia that purchased an undisclosed portion of Northern Brewer, for their "operational experience"

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Old 01-14-2013, 05:46 PM   #42
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My guess would be that it all has something to do with this Private Equity firm from Philadelphia that purchased an undisclosed portion of Northern Brewer, for their "operational experience"
An interesting first post...to say the least!
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Old 01-14-2013, 06:36 PM   #43
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An interesting first post...to say the least!
It's not necessarily new news, but maybe it's been hush-hush?

http://www.bizjournals.com/twincitie....html?page=all
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Chris Farley launched Northern Brewer Inc. in 1993 when he was 18 years old, and built it into one of the nation’s largest suppliers of home-brewing and wine-making products — funding that growth initially with loans from college friends and later by strong sales.
Recently, though, Northern Brewer landed an undisclosed investment from a Philadelphia-based private-equity firm, Entrepreneur Partners, which invests in direct-marketing businesses.
Farley will continue to serve as CEO and president.
The Roseville-based firm has about 100 employees, annual sales between $10 million and $20 million and stores in St. Paul and Milwaukee. It will soon open a location on Lyndale Avenue in Minneapolis. Northern also sells products online.
Farley inked the deal with Entrepreneur Partners partly to tap into the firm’s expertise. Entrepreneur’s other portfolio companies include AmeriFile, a Marietta, Ga.-based company that markets office products such as folders and labels, and Peachtree Business Products, an Atlanta-based company that sells marketing materials and other products.
“What I’m really looking for is sage guidance,” Farley said. “These guys have a lot of operations experience.”
Northern is forming a board of directors for the first time. Among the members is Steven Wexler, former CEO of Medical Arts Press, a Brooklyn Park-based publisher of forms and supplies that was sold to Staples Inc. in 2002 for $385 million in cash.
Entrepreneur Partners’ deal with Northern marks the second time in as many years that outside investors put money into a Twin Cities home-brewing supply business. Last year, former investment banker David Kidd and business partner Matt Estep acquired St. Louis Park-based Midwest Hydroponic & Homebrewing Supplies.
Private-equity investors are interested in home brewing partly because they see the success of the craft brewing industry, Kidd said. As enthusiasm for craft beer grows, so does interest in brewing beer at home.
“The investor community has watched the growth take place in craft beer, particularly in a down economic period when regular beer sales are flat and even down. They started to look into surrounding areas [like home brewing],” he said.
Midwest’s sales are up by double digits this year compared to 2010. The company doesn’t disclose revenue.
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Old 01-15-2013, 02:15 PM   #44
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Just has been my experience that these firms require large returns for their investments which requires freeing up cash, the easiest way to free up cash is by payroll cuts, especially higher level employees.

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Old 01-15-2013, 02:48 PM   #45
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Wow, I'm late to the party on this one. I was a semi-regular watcher of BTV, and really enjoyed Dawson's deadpan delivery and sense of humor. He and Jake will be missed, but at least we can enjoy their blogging exploits. I appreciate that Chip gave his 2 cents here at HBT.

I also noticed the NB flat-rate shipping that disappeared. Harumph! It all makes more sense now, though.

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Old 01-17-2013, 05:27 PM   #46
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Have to say, when not buying at my LHBS, I always supported Northern Brewer because I was a fan of BTV and Jake & Michael. Between just finding out (I'm late to the news!) they are gone, the whole "private equity firm" deal and the removal of flat shipping...I don't see any reason for me to buy from them anymore.

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Old 01-17-2013, 05:35 PM   #47
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...Between just finding out ...the whole "private equity firm" deal ...I don't see any reason for me to buy from them anymore.
What's wrong with the private equity firm? A better-capitalized shop that specializes in operational improvements is usually considered a plus.
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Old 01-17-2013, 06:57 PM   #48
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Jake Keeler posted on Twitter than Dawson got a job as a Brand Manager at Wyest.

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Old 01-18-2013, 12:44 AM   #49
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What's wrong with the private equity firm? A better-capitalized shop that specializes in operational improvements is usually considered a plus.
I think for me tho - this case doesn't make sense. As I read it (granted I'm tired) they have their fingers in 2 other pies. Office supplies and marketing products.

I know people like to think that if you can run a sandwich shop you can run a car company (so to speak) but from what I've seen here and elsewhere, the dropping (essentially) of BTV, Jake and Dawson and Chip all leaving and dropping flat rate shipping - it's been overwhelmingly negative. I've yet to talk to anyone who says they'll NOW do business with NB due to the changes. Routinely it's been "I'll still buy but shop around" or "I won't buy anymore".

Homebrewers and the industry have always had this kind of "family" feel to it - we're emotionally invested in one another's successes and stories - NB doesn't feel like that anymore.

I used to shop there exclusively - mostly because guys like Dawson were answering my questions via facebook and BTV. Now I comparo shop and have yet to come out ahead with a NB cart vs Midwest, Rebel Brewer or LHBS.

And make no mistake - I'm not anti-big business, (the company I work for could literally buy NB 170 times over) just that from the outside looking in and speaking to other HBs - this one didn't make sense.
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Old 01-18-2013, 03:47 PM   #50
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Good response, teal.

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