Going Concern Offering: Brands, Inv., Brewery & Restaurant Equip.

Overbid Auction Bids Accepted:

to December 9, 2019

Going Concern Offering Featuring the Assets, Including Intellectual Property (Patents, Trademarks and Brands), Inventory, Brewing, Restaurant and other Equipment

Onyx Asset Advisors, LLC has been formally engaged as the exclusive sales agent for Barley Forge Brewing Company.

For additional information, including full access to the data room, questions or to schedule an inspection of the facility, please return an executed copy of the attached non-disclosure agreement to Paul Buie (information below).  Please note that we are only able to accommodate a limited number of inspections each day. 

Paul D. Buie, Managing Director
Onyx Asset Advisors, LLC
555 West 5th Street, 35th Floor
Los Angeles, CA 90013
O: +1-213-246-2837 / M: +1-714-717-8870
E: PBuie@thinkONYX.com

Transaction Overview

On October 6, 2019, Barley Forge Brewing Company (“Barley Forge”) filed a voluntary petition for chapter 11 bankruptcy after failed efforts to tap into the wholesale beer distribution market weakened the financial standing of the company, which amongst other factors, led the company to seek bankruptcy protection.

A proposed stalking horse bidder has been identified and has signed a letter of intent to acquire substantially all of Barley Forge’s assets, subject to an auction and overbid rights.  Presently, the Debtor intends to hold an Auction on December 11, 2019 and has retained the services of Onyx Asset Advisors, LLC (“ONYX”) to market the assets and solicit overbids in advance of the proposed auction sale date.

The Asset Purchase Agreement (“APA”) is being finalized with the stalking horse and will be added to Data Room upon completion. Below are the tentative bid procedures which will be confirmed once the APA is finalized:

To constitute as a Qualified Bid, the bid must, at minimum, meet the following requirements:

  1. Only Qualified Bidders may participate in the Auction and sale process.  As defined in the Bidding Procedures, Qualified Bidders are those prospective bidders who deliver a Qualified Bid in writing to counsel for the Debtor, M. Douglas Flahaut, Arent Fox LLP, 555 West Fifth Street, 48th Floor, Los Angeles, CA 90013, Email: douglas.flahaut@arentfox.com, so that the Qualified Bid is actually received on the Monday that immediately proceeds the Auction by 5:00 p.m. (PST). 
  2. submit an offer of at least seven hundred and twenty-five thousand dollars ($725,000) in cash consideration;
  3. provide satisfactory evidence of the Qualified Bidder’s financial ability to perform the offer;
  4. be accompanied by a fifty thousand dollar ($50,000) good faith deposit (the “Overbid Deposit”), in the form of a cashier’s check, which will be non-refundable if the Qualified Bidder is the Successful Bidder at the conclusion of the Auction and the sale does not close due to the Qualified Bidder’s default; and
  5. submit a proposed APA with all terms substantially different than the terms set forth in Sale Agreement identified via a red-lined document or some other similar method of comparison such that all proposed changes are highlighted for the Court and interested parties.

Process Timeline (all dates tentative until APA is finalized) 

  1. Due Diligence period – November 12, 2019 to December 9, 2019
  2. Qualified Bid Due – 5:00 p.m. (PST), Monday, December 9, 2109
  3. Auction – Wednesday, December 11, 2019
  4. Bid acceptance – Wednesday, December 11, 2019

The auction will likely take place at the United States Bankruptcy Court, Central District of California, Santa Ana Division, Courtroom 5B, 411 West Fourth Street, Sana Ana, California 92701. Timing and details to be determined and added to the Data Room once confirmed.

Due Diligence Facility Tour

Available Dates*:        Dates TBD

*We require at least 48 hours’ notice in scheduling on-site inspections. Facility and inspection details will be provided upon confirmation.

ONYX has not independently verified any of the information provided or contained herein. Neither ONYX or any of its affiliates or representatives or advisors makes any representation, warranty or guaranty of any kind, express or implied, as to the accuracy, completeness or reasonableness of the information contained herein or any other written or oral communication transmitted or made available to any recipient. ONYX and its respective affiliates and representatives expressly disclaim any and all liability based on or arising from, in whole or in part, such information, errors therein or omissions therefrom.

Company Overview

Barley Forge is a family-owned craft brewery founded by Greg Nylen and his wife Mary Ann Frericks.  It opened its doors in October 2014 and has been a fixture of the community ever since.  Barley Forge has over 750 independent Yelp reviews and maintains a 4.5 star average as of November 4, 2019.  

The company brews Belgian, West Coast and German-style beers – a blend of traditional, recognized styles and creative twists that draw from the melting pot of cuisines and cultures present in Southern California. In addition to being Costa Mesa’s first-ever production brewery, the Barley Forge taproom is the only brewery in the area to operate an on-site kitchen and offer a full menu.

The brewery operates in 10,000 square feet of combined tasting room, kitchen, bottling, aging, and production-brewing facilities and is currently open 7 days a week.Located a short distance from South Coast Plaza in the mixed-use SoBECA (South Bristol Entertainment and Cultural Arts) district of Costa Mesa, which is very close to the popular retail and dining venues such as The CAMP and The LAB.and is also adjacent to some of the area’s most popularbeaches, making Barley Forge an attractive destination for craft beer fans throughout Southern California.

Due to its prime location as well as the quality of the food and beer, the tasting room has historically been profitable.

Awards

Barley Forge has also won several awards for best brewery and specific awards for some of its beers.

  • 2015 OC Weekly Best Brewery
  • 2017 OC Weekly Best Brewery
  • OC Weekly Reader’s Choice Best Brewery
  • OC Weekly Reader’s Choice Best Local IPA

Grandpa Tractor, their Dortmunder Style Lager, is a Gold Medal Winner in the 2018 Great American Beer Festival competition.

Another of their flagship beers, The Patsy, won a Silver Medal at the 2018 World Beer Cup, in the category of Field Beer. The World Beer Cup, often referred to as “the Olympics of beer,” is the most prestigious beer competition in the world, with nearly 6,600 entries from 55 countries in 2018.

Additional company, product and location information is available in the ONYX Data Room and on the Barley Forge website: www.barleyforge.com

Distribution Overview

In addition to the tasting room, Barley Forge began selling beer to wholesalers for distribution.  Beginning in approximately 2015 Barley Forge’s wholesale distribution grew to approximately 5,000 barrels in the most recent year.  Unfortunately, this period of very strong growth on the distribution side coincided with a veritable boom in the craft beer industry’s attempt to move into wholesale distribution.

As a result, there was significant price competition and it became very difficult to profitably wholesale craft beer for most but the highest-volume craft brewers.  As such, the wholesale distribution side of Barley Forge has never been significantly profitable and, in fact, suffered substantial losses in 2018 and the first half of 2019.

Facility Overview

Tasting Room

Barley forge has a large tasting room with 18 rotating taps and two roll-up garage doors which create an open and airy environment.

Barley Forge has a licensed kitchen on-premise and serves food seven days a week. Menu options range from salads and deli plates to panini, burgers and other grilled items.

Brewing

Asset listing and valuation information provided in the Data Room

Conditional Use Permits “CUPs”

Barley Forge has been granted several valuable CUPs which include:

  • Kitchen
  • Extended Hours (11:30am to 1am, on the weekends)
  • Live Music
  • Outdoor Grilling

Core Beers – Descriptions provided by Barley Forge

The Patsy – Rye Stout Brewed With Coconut

The Patsy® is Barley Forge’s coconut rye stout, winner of a prestigious 2018 World Beer Cup Silver award in the Field Beer category. Brewed with US 2-row malt, flaked rye, chocolate rye, and various English specialty malts, this medium-bodied beer features a rye spiciness balanced with dark chocolate and espresso, as well as copious amounts of toasted coconut. This beer pairs well with pulled pork, braised brisket, gorgonzola cheese and chocolate desserts.

Grandpa Tractor – Dortmunder-Style Export Lager

2018 Great American Beer Festival Gold-medal-winning Grandpa Tractor® is Barley Forge’s Dortmunder Export, an almost forgotten style. This full-bodied, moderately hopped German lager was the favorite drink of coal miners and heavy industry workers of the first half of the 20th Century in Germany. Hoppier than a Helles and less hoppy than a Pils, Barley Forge’s Dortmunder strikes a balance between the two with a hefty mouthfeel derived from Pilsen malt and higher alcohol content (around 5.0% abv). This refreshing beer goes well with the end of a hard day at work and pairs nicely with grilled steak, any type of pork dish, and any sort of Asian or Hispanic cuisine.

The Black Dahlia – Belgian Style Dark Ale

The Black Dahlia® is Barley Forge’s Belgian Strong Dark ale. This beer is brewed as an homage to the great Trappist holiday beers from Belgium. Brewed with Belgian Pils, Munich malt, a host of Belgian specialty grains, and a generous portion of dark Belgian candy sugar, this 11% ABV beer is a great one to age as it will continue to improve for years. This beer pairs well with braised beef dishes, steak, and dark chocolate desserts.

Don Perfecto – Belgian-Style Witbier Brewed With Horchata-Style Spices

Don Perfecto® is Barley Forge’s horchata wit. Designed to evoke the flavors of Mexico’s popular agua fresca, this beer is brewed with Perle and Styrian Golding hops as well as Belgian pils and Munich malts, flaked oats, flaked and unmalted wheat, and flaked rice. It’s also spiced with Mexican cinnamon and vanilla rather than the traditional coriander and bitter orange peel. The finishing touch is lactose for some residual sweetness. This beer pairs well with spicy foods, Asian food, and Mexican cuisine.

El Técnico – Amber Ale Brewed With Agave Extract

El Técnico® is Barley Forge’s amber ale. Brewed with agave extract and a grain bill of UK and US pale malts, Munich malt, UK dark crystal and Victory malt, this beer has a complex maltiness balanced against Cascade and Centennial hops and the residual sweetness of the agave. This ruby red amber pairs well with spicy Mexican food or any type of grilled meat.

The Orange Curtain – India Pale Ale

The Orange Curtain® is Barley Forge’s India Pale Ale. Focusing on “old school” hop flavor over hop bitterness, Barley Forge’s IPA features Warrior, Centennial and Cascade hops against a nicely rounded malt backbone that provides a medium bodied accompaniment. This combination has citrus notes worthy of the name, which is a nickname for Orange County, California where the brewery is located. This beer pairs well with spicy Thai or Vietnamese food, burgers, or oily, full-flavored fish such as salmon.

Future Tripping – Double India Pale Ale

This DIPA is brewed with a simple grain bill of Two Row, Pale Ale Malt & some Cara-Pils. A late addition of Dextrose is added to the boil to lighten the body and boost the gravity. A tried & true hop combination of Simcoe & Amarillo are showcased in this hop-forward beer. Simcoe provides a unique passion fruit pine flavor & aroma combined with Amarillo’s citrus characteristics will keep you coming back for more. Future Tripping is finished off with a hefty amount of Simcoe & Amarillo in the dry hop. Boasting 100+ IBUs, this beer is quite balanced and not too bitter as it weighs in at 9.25% ABV.

Nom Nom – German Hefeweizen Brewed With Mango

Nom Nom is Barley Forge’s German Hefeweizen brewed with real mango. Starting with Pilsner, Wheat & Munich malts, we add pure mango juice powder directly into the boil., then just enough Northern Brewer hops strike a synergistic balance between malt sweetness and bitterness. A traditional Hefeweizen yeast is used, which produces a slight banana and clove aroma. To top it all off, we add some natural mango extract to the brite tank to round out the mango flavor. This delicious offering pairs perfectly with friends and food alike.

 

IMPORTANT LEGAL NOTICE:

The information in this memorandum does not constitute the whole or any part of an offer or a contract, nor does it purport to contain all information that may be required or relevant to a recipient’s evaluation of any transaction and recipients will be responsible for conducting their own investigations and analysis.

The information contained in this memorandum relating to the Assets has been supplied by Barley Forge. It has not been independently investigated or verified by ONYX, its agents or any other party.

Potential purchasers should not rely on any information contained in this memorandum or provided by Barley Forge or ONYX (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit.

Barley Forge or ONYX and their respective officers, directors, staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, completeness and reasonableness of any information provided in connection herewith and (ii) do not accept liability for the information provided in connection herewith, including information contained in this memorandum, whether that liability arises by reasons of Barley Forge or ONYX negligence or otherwise.

Any sale of the Assets will be made on an “as-is, where-is,” and “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Barley Forge or Onyx. Without limiting the generality of the foregoing, Barley Forge or ONYX and their respective officers, directors, staff, agents, and attorneys, hereby expressly disclaim any and all implied warranties concerning the condition of the Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

Except as otherwise noted, this memorandum or provided information within the Data Room speaks as of the date hereof. The delivery of this memorandum should not and does not create any implication that there has been no change in the business and affairs of Barley Forge since such date. Neither Barley Forge or ONYX, or their respective staff, officers, directors, agents and attorneys, undertakes any obligation to update any information contained herein.

This memorandum contains confidential information and is not to be supplied to any person without ONYX’s prior consent. This memorandum and the information contained herein are subject to the non-disclosure agreement.

 

Images


About