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Broken Shed Vodka

Private Equity

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Transaction Size
USD 4,500,000.00
Share Price
USD 1.00
Minimum Investment
USD 50,000.00
Issue Type
Private Equity
Sector
Diversified

Broken Shed Vodka was founded by two USA ex-pats living in Wanaka, New Zealand. The product is crafted in Wanaka and is a differentiated product made from whey, (a protein) and mineral water. These source ingredients give it a superior, smooth warmth and allow it to be made without the chemicals, balancing agents or other additives found in other vodkas. Using whey means the product is is gluten free and GMO free from its origins.

Broken Shed is seeking growth funding of USD4.5million.

This funding round has been anchored by existing members of Yes Whey LLC and by John Fitzgerald, the new CEO. The remaining requirement to complete this round is USD2.5million. The capital raise is structured such that the capital will be raised by Yes Whey LLC, Broken Shed’s Parent company, at a USD3.5million pre-money valuation. When complete, the new funding will bring adequate resources to fund the company’s growth plans past the coming year, by which time the company expects to have grown sales sufficiently to allow for any further capital to be funded at higher valuations.

In addition to new capital, Broken Shed has new management with John Fitzgerald now serving as the company’s CEO. After a career in finance, John was most recently President of Good Food Group Inc, where he demonstrated his capabilities by building a substantial enterprise from a small start. This experience will serve Broken Shed well. In addition to anchoring the new funding round, John will accept compensation 100% in equity.

In addition to John, Broken Shed has attracted a highly experienced management team including Steve Bellini (formerly President Seagram’s North America - Makers Mark, Jamesons, Captain Morgan - and Sidney Frank Imports) and Jean Marie Heins ( ex Head of Marketing of SFI). At Sidney Frank they were key members of the management team behind the successes of Jagermeister, Grey Goose and Casamigos Tequila.

Adequately resourced and with new leadership, the company will be well positioned to develop the

potential it has always seen for the brand.

Key investment highlights:

  • Great product, brand, and market position. The use of whey feedstock to produce distillate and the blend of mineral and spring waters differentiates Broken Shed from other vodkas. New Zealand has demographic and international appeal that together bring high potential for the brand’s position in the market having strong associations with purity, nature and quality. Market share leaders at Broken Shed’s price point are older brands and offer an opportunity for disruption by a challenger brand.
  • Highly experienced management team. The industry is a close community with deep relationships and Broken Shed has decades of goodwill and experience in creating and building spirit brands. In addition, the Board includes members with further industry expertise that will serve the company well.
  • Compelling Valuation. New money will represent the majority interest of the newly capitalised Broken Shed. The pre-money capitalisation consists primarily of the Series B Preferred and other obligations of the old company, which will be converted to equity interests. All investors will enjoy identical interests in the company.

There are many spirits challenger brands vying for shelf space, but the consolidation of the industry’s distribution tier means few will be able to find top tier distribution partners. This represents a tight structural bottleneck in the industry and a significant entry barrier. BrokenShed has already received an enthusiastic welcome among top flight distributors and has a presence in 15 States of the USA plus Washington DC. This is attributable to the quality of the product and the deep, established relationships of the management team with distributors. In 2019 Broken Shed expects to double the footprint again to 30 States.

Vodka remains the largest category in US spirits, bigger than all Whiskeys combined. Even a small share of the market would produce a compelling return on capital. Titos and New Amsterdam have successfully disrupted the budget end of the market while demonstrating the need for a brand refresh in Vodka. Broken Shed plans to achieve similar success in the premium end. 

A summary of the investment opportunity is attached in Documents.

TO REGISTER INTEREST

Click on the tab to register interest you will be contacted by an advisor to the company and be provided access to the full Investment Pack

Broken Shed Exec summary
January 5, 2020
5/1/2020

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