Alpine, Wyoming-based Melvin Brewing didn’t have to look far to find a buyer. Brewbound has learned that Jackson, Wyoming-based Roadhouse Brewing has signed a purchase agreement to acquire Melvin and its operations.
Roadhouse Brewing co-founder Colby Cox confirmed to Brewbound that the deal is in place and the transaction is expected to close “imminently” within the next few weeks, although there is not yet a firm closing date.
“We’re buying the company,” he said. “It’s gonna happen. We’ve been looking at Melvin for a long time. There’s no hesitation there. We’re just dotting some I’s and crossing some T’s.”
Michael Richter, managing director of GLC Advisors & Co. LLC, the investment banking firm tasked with finding Melvin an investor or buyer, also confirmed that a purchase agreement has been executed between the companies and “everyone is working expeditiously to close the transaction.”
Melvin Brewing CEO Frank Magazine told Brewbound that both parties are “extremely” interested in getting the sale to close. Magazine described Roadhouse as a buyer that understands the Melvin brand, its culture and the challenges facing breweries its size.
“We are very anxious to work together because I think the combined brand image of both Roadhouse and Melvin are going to be tremendous,” he said.
Roadhouse’s Plans for Melvin
Cox, who founded Roadhouse in 2012 with Gavin Fine, said he has watched the Melvin brand “grow and prosper and make big waves in the craft beer industry,” and Roadhouse wants “to see that brand continue to grow and thrive and hope to play a very integral role in making that happen.”
“Our vision for Melvin is to continue to build on the success that they’ve had in the past and for many years to come,” he added.
In late June, Melvin enlisted GLC Advisors and Ethan Stienstra, a beverage brand portfolio and marketing strategist, in its search for a partner or potential buyer. At the time, Stienstra called Melvin “a marketer’s dream,” with potential as a destination brewery for outdoor lifestyle enthusiasts in Alpine, near Jackson Hole Resort, Teton National Park, and Yellowstone National Park.
Hints at Melvin’s future partner were apparent during the 2022 Great American Beer Festival (GABF), as the two Wyoming craft breweries were set up next to one another during the early October event. Cox admitted that the GABF set up was a tease for the crowd.
In Melvin, Roadhouse gains more than 20,000 barrels of output. In 2021, Melvin produced an estimated 23,500 barrels, a +1% year-over-year increase, according to the Brewers Association (BA).
Melvin’s output in 2021 was double Roadhouse’s volume, with the latter growing production +41%, to 11,095 barrels, its highest output ever, according to the BA.
Cox described Roadhouse’s own growth over the last five years as a “meteoric rise,” growing from 300 barrels to around 12,000 barrels with distribution in Wyoming, Idaho, Colorado, Utah, Montana and California.
“We think that the combination of the leadership we have at Roadhouse with a lot of the talent that’s at Melvin, bringing those together in terms of the people and our processes is going to be great for both companies,” he said.
Following the transaction, Roadhouse and Melvin will exist as “two distinct brands,” Cox said.
“They share a lot of the same values in terms of fierce independence in craft beer and love for brewing traditional styles in combination with being highly innovative,” he said. “We want to continue all of those key elements, but we share a lot of the same values as organizations and we will be running them as two separate brands.”
Roadhouse, which is a certified B Corp, plans to roll Melvin into that program in the coming years, Cox said. Roadhouse has ranked among the “Best for the World B Corporations,” meaning it is among the top 5% of all B Corps in its size group worldwide for sustainable business practices.
Other future plans include expanding Melvin’s taproom, Cox said. Roadhouse is already in the process of expanding its own brewpub in Jackson’s town square.
Cox added that it’s still “to be determined” if Roadhouse will produce its offerings at Melvin’s facility. But the initial plan is to “run the breweries as they exist today.”
The Rise, Fall and Rebound of Melvin
The 13-year-old Melvin, which was founded by Jeremy Tofte and Kirk McHale, built a reputation as an IPA brewery and was once one of the fastest growing craft breweries in the U.S., increasing production from 7,896 barrels in 2016 to 19,868 barrels in 2017 and 22,665 barrels in 2018. Production declined -6%, to 21,348 barrels, in 2019 before bouncing back to 23,173 barrels in 2020.
During the 2017 GABF, Melvin was among the most talked about breweries at the festival, creating a raucous scene inside and outside of the Denver Convention Center with a branded Sprinter van towing a brass band with a person in an elephant costume dancing with Melvin staffers. During each GABF session, Melvin attracted some of the largest crowds of the weekend to its booth, where a DJ spun rap, hip-hop and rock tunes.
Later in 2017, McHale was accused of groping a server at Menace Brewing in Bellingham, Washington. The incident was detailed in a January 2018 memo outlining corrective actions for McHale and noting the implementation of a more comprehensive sexual and other harassment policy for all employees. Tofte issued an apology in a post on Melvin’s site.
McHale is no longer employed by the brewery, and Melvin, which had opened a Bellingham outpost in 2017, eventually closed that space in 2019.
In June 2020, Melvin restructured its leadership team, with Magazine joining as CEO. Tofte stepped away from the daily operations of the business, but retained a seat on the company’s board.
Magazine told Brewbound that when he was hired, he was “not necessarily” tasked with preparing Melvin for a sale, although “that certainly was an option.”
“My background dictated that if it went in that direction, I would be able to handle it,” he said. “The first thing was, OK, let’s look at this business. And let’s get it managed through the COVID periods and all the other challenges that were going on at that time. Let’s come out the other end and determine the direction that’s best for the company.”
Ultimately, Melvin’s board of directors, led by independent private equity investor Zander Doroski, hired GLC and Stienstra to seek an investor or buyer.
All parties are in agreement on the end result, Magazine said.
“I think across the board from Zander, our chairman, the entire board, investor group, myself, Roadhouse group, I don’t think you can find a person who is negative about the deal,” he added.
“This is my eighth acquisition or divestiture, and without even being close, the Roadhouse team has been the most pleasant and compliant and good to work with,” he continued. “We’ve worked together very famously, put together a hell of a deal, and I think it’s gonna blow up. We just have to get through all the bureaucracy.”
Melvin and Roadhouse are now working through the transfer of federal, state and local licensing to ensure there are no hiccups when the deal does close, Magazine said.
“We’re just trying to get out in front of all of that, so when Day One comes, we can hit the switch and go,” he said.