Western Australian hospitality group, Triple-1-Three Limited – which owns Otherside Brewing – today announced that it is moving to acquire the assets of West Leederville-based Nowhereman Brewing Co.

Under the deal, which is subject to shareholder and regulatory approvals, Triple-1-Three will acquire Nowhereman’s West Leederville brewpub and associated assets, while the Nowhereman business remains a separate entity receiving in return shares in Triple-1-Three.

Triple-1-Three Managing Director James Legge told Brews News that the arrangement was a swap of Nowehereman’s assets for shares in Triple-1-Three.

“We thought we’d leave the business behind because we’re not acquiring any of the obligations or any debt within the business,” he explained.

“But they, the Nowhereman entity, effectively becomes a shareholder of Triple-1-Three.”

Nowhereman founder Reece Wheedon said it was a case of Triple-1-Three “purchasing the hospitality assets and, in return, the company – which are not buying – becomes a shareholder in them.”

Asked what the acquisition meant for the future of Nowhereman, Legge said it would continue “in some form”.

“Obviously, it’ll be scaled down and we’ll work out what works in the combined group,” he said.

“But at this stage, they’re continuing brewing in their premises and we will get into that detail as to what brews continue and how it looks in the merged entity.”

If the deal proceeds, Nowhereman’s West Leederville venue will become a part of the Triple-1-Three Group, joining Freo.Social, Mojos and the Otherside Brewhouse, plus the Otherside Brew Lounge, which is set to open this November at Perth Airport’s Terminal 2.

Legge said the move would bring benefits through the combination of the venues, with Nowhereman’s venue to be rebranded as Otherside.

“We already have three venues and adding an additional venue allows us to integrate that into our portfolio venues,” Legge explained.

“And obviously with multiple venues you can have systems across all of them and improved buying power.

“So then you’ll get the benefit of all our existing contracts and relationships, and we’ll be able to improve the pricing that they receive.”

As part of the acquisition, Nowhereman founder, Wheadon, will remain across the amalgamated entities and current Nowhereman General Manager Pia Poynton will be appointed as Otherside’s Head of Sales.

The changes will also coincide with current Otherside Sales Director, Chris Webster, exiting the business to pursue a new venture.

Legge declined to give pricing details of the acquisition, saying the company still had to get shareholder approval.

“So it’s not it’s it’s not something that we will be releasing publicly,” he said.

“But it’s fair to say that Nowhereman acquisition and the additional earnings that they contribute is fairly priced according to the metrics within the in the industry.”

Triple-1-Three underwent an equity crowdfunding campaign in 2021, raising $1.1 million of a planned $2.5 million on a valuation of $24.28 million.

In its 2021 prospectus, the company noted a loss for the previous year of $323,000, though its fundraising page through Birchal was upbeat about the prospects post-COVID.

However, in its FY22 financial report filed with ASIC, the company’s losses had grown to $1.8 million for the year.

Legge said this year had also been challenging.

“Like all brewers it’s been a challenging year, particularly with respect to inflation and rising costs challenges around margins,” he said.

“It’s been a challenging year for everyone to keep up with the rapid change in the market and so we’re not alone. Certainly Nowhereman was the same.

“And a lot of breweries we’ve talked to recently have experienced lots of challenges around particularly costs and keeping your margins.”

He said that while Triple-1-Three will record another loss in its upcoming FY23 results, the company is on a good path.

“We feel, and certainly with this Nowhereman acquisition and the additional litreage that comes through that venue and through their contracts.

And also the [Otherside] brew lounge that’s opening at Terminal Two in Perth in November will bring additional litreage as well and we’re really excited to bring both of those venues into the system in this financial year.”