Case Study
Case Study
Magnolia Brewing Company, LLC sells business assets to New Belgium Brewing Company
Client need
Magnolia Brewing Company, LLC, which established its original brewpub location in 1997 in the heart of San Francisco’s Haight-Ashbury district, encountered financial difficulties in 2015 shortly after expanding its operations with the launch of Smokestack, a barbecue restaurant attached to a new 30-barrel production brewery. The financial difficulties stemmed from construction delays of Smokestack and slower than anticipated development in the neighborhood. Eventually, the company filed for Chapter 11 bankruptcy protection in November 2015 and tried to modify operations to work itself out of bankruptcy.
Upon deciding it was necessary to sell its business assets to pay secured and unsecured creditors, Magnolia approached Baker Tilly Capital to develop and implement a competitive transaction process to ensure maximum value and an optimal transaction structure.
Baker Tilly Capital solution
The investment banking team at Baker Tilly Capital worked closely with Magnolia throughout the sale process, as well as on the company’s behalf with the creditors’ committee in bankruptcy court. Our team analyzed Magnolia’s situation and conducted an extensive marketing campaign to more than 100 potential financial and strategic buyers in a robust auction process. After receiving indications of interest from several parties, we worked to maximize the transaction’s value and probability of closing by utilizing a stalking horse bid.
Results
The outcome of the transaction process matched Magnolia with a purchasing group led by New Belgium Brewing Company, which acquired the company for $2.7 million. The purchasing group, Ripple by the Bay, LLC, is a majority-owned subsidiary of New Belgium, with Dick Cantwell, founder of Elysian Brewing Company, and Oud Beersel, a Belgian lambic producer, serving as minority partners.
The new partnership group will continue to operate both Magnolia locations with existing staff and brands, preserving Magnolia’s history while providing further resources to grow the company in the future.
For more information on this topic, or to learn how Baker Tilly Capital specialists can help, contact our team.
