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Employee share program paves way for Wayward IPO

Sydney’s Wayward Brewing Co. has introduced a new ownership model that will give employees shares in the company in anticipation of an eventual IPO.

Wayward’s Employee Share Ownership Plan (ESOP) means that 4 percent of the business has been offered to employees as stock options, with additional stock options available each year based on company performance.

“It’s about letting everyone share in the success,” explains founder Peter Philip.

“We’ve always felt each other [and] We have always acted as if we were an employee-owned organization. And I think everyone had an attitude of contributing to the good of the company, but we just want to make sure everyone can share in the success.”

Other breweries around the world have invested in employee ownership schemes, including New Belgium Brewing, which subsequently became the target of a high-profile takeover by Lion, which owns Kirin.

In Australia, Stone & Wood primarily invested in an employee share scheme before it was also acquired by Lion, and Bridge Road Brewers is one of the latest brewers to invest in a similar scheme.

However, Philip highlighted the potential problems that can arise from an employee stock option plan if the company is not ready to sell.

“The way we did it, it’s an option plan,” he told Brews News. “Basically, the complication of any equity ownership scheme is that private company stocks are illiquid, so there really isn’t a market for anyone to sell.

“So we did it as an option system, which means they effectively get their options for free and they don’t have a tax problem, but they get the same benefits. You basically get the same benefits for any type of eventual liquidity.”

Wayward, he suggested, would not consider a buyout situation, instead preparing for an initial public offering (IPO) where the company would be publicly listed on the Australian Securities Exchange (ASX).

Representing the brewing industry, only Mighty Craft, Broo Ltd and Good Drinks Australia, owner of Gage Roads Brewing Co., are currently present at the ASX.

“Our intention is that we want to move to an IPO in the next two to three years,” said Philip.

“Essentially, everyone gets shares in a public company at this point. [Then they can] Enjoy all the benefits of just being an ordinary shareholder in an ASX-listed company.”

Philip explained that planning for Wayward’s IPO has not yet fully begun.

“We’ve made it pretty clear that this is a future thing, which we haven’t thought about yet, but it’s our intention,” he said.

“We have some big growth plans for the next few years – we have set ourselves the goal of becoming one of Australia’s top 10 breweries.

“And we’ve got some good shareholders behind us who are willing to put up some money to help make that happen. So keep an eye on that area – some exciting things are about to happen.”

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