We knew that Riverside Company had exited Uinta Brewing Company in March 2019, based on a trade article on July 10, 2019. This was relevant as the unitranche lender to the craft brewer is Golub Capital (GBDC), which at year end 2018 had $5.9mn invested in debt and equity. In the IQ 2019, the exposure was reduced to $1.6mn. All debt was on non accrual since IIQ 2018. Golub now owns Uinta, and a new capital structure will emerge, which we may learn more about on the next Conference Call. That may involve the asset manager providing additional capital to boost the business. In the interim, we’ve learned more – thanks to a trade publication – what ails the brewer. The company, thanks to Riverside’s investment capital, grew very fast to become a national presence. Here’s an extract explaining what went wrong:
That expansion led to a wide but shallow market. Increased competition from an ever-growing number of breweries resulted in market penetration weaker than expected.
“Over the course of (the Riverside investment), the challenge of competing on a national scale without large marketing budgets and personnel became extraordinarily difficult for us to sustain,” Uinta president Jeremy Ragonese told Brewbound.
As a result, Uinta has been pulling back from a variety of markets in a reconfiguration of the footprint expected to last through the summer.
The question going forward is whether Golub can do any better.