WINE INDUSTRY INSIGHT
EMAIL EDITION - VOLUME I, NUMBER 94 - June 5, 2009
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LIMBO! New Vine’s Interim Funding From IBG Raises More Questions Than Answers
Dante’s first circle of Hell has a special place called limbo which resembles an eternal dentist’s waiting room where you sit forever and never actually get your cavities filled.
Much the same could be said of the vague, deal-in-progress hammered out Thursday afternoon between New Vine Logistics and Inertia Beverage group.
DEBT AND DUE DILIGENCE NOW, SOME KIND OF “TRANSACTION” LATER. MAYBE.
According to the official news release: IBG “has agreed in principle with Silicon Valley Bank to acquire its debt position in New Vine, subject to due diligence and definitive agreements.”
In an interview with Wine Industry Insight, Jansen said he could not address the issue of why IBG — rather than just Silicon Valley Bank (SVB) — was involved in debt funding of New Vine.
Other sources report that Venture Capitalist Bob Ackerman of Allegis Capital has provided the funds — possibly $5 to $8 million — to take out SVB’s debt position and to fund a re-start of operations.
“We’re proceeding with due diligence as quickly as we can” said IBG President and CEO Ted Jansen “We’re already funding New Vine and want to complete the transaction as soon as possible.”
According to Jansen, the due diligence process would take “somewhere between days and weeks.”
IBG’S TRANSACTION OPTIONS WIDE AND VARIED
Jansen left unspecified how much debt was involved and just what sort of transaction was at the end of the process. “I can’t comment on our intent” he said.
However, IBG’s current position and that of the investors leaves them a nearly clear field of options.
Sources knowledgeable in finance and deal making say that there are still other potential suitors in the wings and that some of the many transaction options include:
- Cleaning up systems and finances and “flipping” New Vine to another buyer.
- Completing a merger and syndicating equity among other investors.
JANSEN’S FIRST GOAL: RAMP BACK UP TO SUPPORT CUSTOMERS
“Our main goal is to get New Vine back into operation as quickly as possible to meet the needs of its customers.”
Amazon, Jansen acknowledged, was one of the largest of those customers, but he said he could not comment on the mammoth Internet retailer’s reactions to the New Vine debacle or its intentions.
“Yes, Amazon is important, but we also want to make sure that boutique, artisan wineries have access to the direct sales marketplace,” said Jansen.
EMPLOYEE RECALLS AND BACK SALARIES, FATE OF NVL MANAGEMENT IN LIMBO AS WELL
Jansen said the issues of rehiring workers and making good unpaid wages was up to New Vine. “We’re simply a creditor trying to meet their needs.
He added that that IBG was working with existing NVL management to determine “who is essential to re-start operations” but added that “we [IBG] are not making those management decisions.”
He also sidestepped questions to the ultimate fate of NVL management, saying that depended on due diligence and the completion of the unspecified transaction.
ENTIRE, UNEDITED TEXT OF INTERTIA BEVERAGE NEWS RELEASE
For Immediate Release: June 5, 2009
New Vine to Resume Operations With Inertia Beverage Group Funding
—Immediate Goal Recommencement of Shipping and Compliance Operations—
(Napa, CALIF)—Inertia Beverage Group (IBG) has agreed in principle with Silicon Valley Bank to acquire its debt position in New Vine, subject to due diligence and definitive agreements.
“In order to address New Vine’s customer needs and allow for their systems and operations to get back online and shipments flowing immediately, IBG will provide interim cash funding to New Vine pending final documentation,” said IBG President and CEO Ted Jansen. “Operations are already gearing up and we are confident in the ability of New Vine’s operational team and employees to quickly respond.”
“IBG has from its inception been committed to the direct sales channel as an efficient and profitable way for wineries to access the wine market, better control their brands and expand margins,” said Jansen. “We remain committed to providing leading solutions for the expansion of direct wine sales, on behalf of our clients and the wine industry as a whole, who seek a solution to the complexities of direct shipping.”
About Inertia Beverage Group
Inertia Beverage Group provides solutions for the creation and expansion of online wine marketplaces. Leveraging their proprietary, web-based technologies, IBG gives wineries, retailers and wholesalers the tools necessary to efficiently distribute their products within the expanding direct-to-consumer and direct-to-trade wine markets. Through its REthink EngineTM platform, its free regulatory compliance tool, and Marketplace Services programs, IBG provides its over 500 wine brands access to new marketplaces where supply and demand are united. Recently launched, IBG’s Direct-to-Trade marketplace, WineREvolution.com, provides restaurants and retailers a web-based, fully compliant process to efficiently and legally access a growing list of domestic and international vintners that sell direct to the trade.
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Tom Wark, Wark Communications
707-933-9313 • email@example.com
Kristi Taaffe, Vice President, Marketing, Inertia Beverage Group
707-603-2802 • Kristi.firstname.lastname@example.org
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670 W. Napa St., Suite H, Sonoma, CA 95476
Phone: 707-326-4503, fax: 707-940-4146