Modern Times CEO Jennifer Briggs spoke to Brewbound Tuesday, with an update on the impending sale of the San Diego-based brewery.
As reported earlier today, Kihei, Hawaii-based Maui Brewing has placed a “stalking horse” bid for the brewery, which has been accepted by court-appointed receiver Thomas C. Hebrank, and will set the bar for the auction of the brewery, slated for early June.
Earlier coverage available here: Maui Brewing Places ‘Stalking Horse’ Bid for Modern Times Beer, Auction Slated for Early June
Briggs was joined by Chris Hawkins, an attorney and shareholder of Sullivan Hill law firm, which is helping the brewery navigate its sale process.
On the State of the Auction
Hawkins: “The current auction process, which is going to be completed soon, is absolutely open right now.
“By all means, the door is open and it’s gonna be open to anybody interested for the next several weeks here.”
The deadline for bids above Maui’s offer was initially set for June 3, but was extended by Hebrank to June 8.
Hawkins: “The auction will likely be the morning of June 9, and the court hearing to confirm the winning bidder will likely be that afternoon, but final scheduling is ultimately up to the court.”
The process is being run through the Superior Court of Orange County, California. Onyx Asset Advisors, LLC is helping oversee the sale.
On the Stalking Horse Process
Hawkins: “We had a very competitive stalking horse process, which is the term that’s used for the first bidder that signs up with a seller, but is subject to be overbid, and that’s what Maui is.
“We had several other parties being interested in that position and had other offers come in for it, and Maui was the best of those. As we go through the next couple weeks of over-bidding and get towards the auction, It seems pretty clear, all of the other candidates who are interested in the stalking horse position are going to bid in the auction. And it appears that in addition to those players there are other folks who didn’t really play seriously for the stalking horse position, but that are focused on over bidding.
“So all signs right now lead to a pretty robust auction process.”
Briggs: “Getting the stalking horse was the first major accomplishment in the process, and now we have the over-bid process, so we’ll keep moving through it.”
Hawkins and Briggs declined to share the amount of Maui’s bid.
On Expectations for the Future of Modern Times
Hawkins: “Lots of people want to make sure as much of Modern Times as possible survives, as many employees as possible keep their jobs, and from what we’ve seen in the bidder universe, that’s pretty much what everybody is contemplating.
“We’re not seeing anything in the market indicating that a likely winning bidder wants to shutdown Modern Times, liquidate it, [or] do anything else drastic like that. The reason Jen, and all the Modern Times employees, and the outside professionals like me or Onyx – who’s running the sale process – are working as hard as we are, is to make sure that this is a going-concern sale.”
On Who Has Showed Interest in Modern Times
Briggs: “I’ve been surprised at the variety of them.
“It’s been a big variety of different types of companies looking at us, so it’s been quite an experience getting to meet with these different people.”
On Briggs’ Role at Modern Times Now and Into the Future
Briggs: “What I try to do is to stay present in the moment and do the best that I can every day to make sure this is a good company and that the new owner gets a really thriving, good company. But what I tell my coworkers at Modern Times, too, all the time, is we just don’t know, and this process is gonna work itself out, so the best that we can do is just do good work every day.”
Asked if she will stay on, Briggs said “it depends on who the buyer is.”
Briggs: “You don’t need two CEOs in a company. So when people have asked me, ‘Will I stay on?’ my answer is exclusively ‘Yes.’ And I will do whatever it takes to help make a really positive transition, because I’ve really come to care about these people, and so I want to help make it the best situation that we can make it and do whatever it takes to get there.”
On the State of Modern Times
Briggs: “What we’ve been able to do in a really short period of time has been nothing short of amazing. The team is solid. Our sales are good.
“Given all the things that we’ve had confront us this year, to be able to actually be somewhat recovering while in receivership I think is a really unique place to be. And so for anyone who ends up being the buyer of this company, they’re getting a really good company at the end of the day. That points to the power of the brand.”
According to publicly available information on Onyx’s website, Modern Times posted “sales north of $30 million annually” from 2018 to 2020 and “produced more than 50,000 barrels annually.” Sales in 2021 were “estimated at $27.2 million,” with about 37,100 barrels produced, a number that was down from the 53,371 barrels produced in 2021 shared with the Brewers Association.
“Current demand in 2022 for mixed 12-packs exceeds company projections, and the company has also received, from a large customer, a new packaged launch support mandatory in Arizona, California, Hawaii and Nevada,” the memo reads.
Modern Times’ offerings are distributed throughout California, Arizona, Colorado, Nevada, Utah, Hawaii, and Texas, with 73% of its volume in 2021 concentrated in its home state of California and 67% of its volume flowing through Stone Distributing.
Modern Times also roasted more than 120,000 pounds of coffee in 2021.