The long, public sale of Modern Times Beer is now over. Right? Well, it was announced Friday that Kihei, Hawaii-based Maui Brewing Co. would be buying the assets of San Diego-based Modern Times Beer for a reported $15M+. It’s been a rollercoaster ride for Modern Times over the last couple of years. At one point, the brand was one of the fastest growing craft breweries in the country, expanding with locales up and down California and beyond.
But last February, Modern Times began raising eyebrows when it closed branches in Portland, Oakland, Santa Barbara and Los Angeles. That came after Modern Times had already raised way too many eyebrows when an industry wide MeToo movement had original founder Jacob McKean stepping down in 2021 (and an employee fired), after the company was accused of creating a hostile and toxic workplace environment on social media. Then last March, Modern Times’ senior lender Zions Bancorp. put the company in receivership after it fell behind on payments. From the Modern Times blog:
So, what is a receivership? It’s complicated, but it boils down to this: our bank nominates someone to oversee the sale of the Modern Times business. Once approved by the court, this nominated person, or “receiver,” will be the final word on our financial decisions for the immediate future, and in charge of the sale of the brand to interested parties.
While this isn’t a comfortable position for any company to be in, a receivership should hopefully allow Modern Times to be sold as a “going concern,” as opposed to “turning off the lights” and liquidating the equipment and inventory. A going concern sale would raise the odds of the new buyer keeping our talented staff, amazing products, and renowned customer experience intact. Obviously, this is not an ideal situation, but across a field of exceedingly difficult choices, it’s the best one available and is far preferable to ceasing operations entirely. We expect this process to move swiftly. Financial situation aside, we have an amazing brand.
Now, at the beginning of August, the sale to Maui seems final (maybe closing in October), but it was not without its curveballs. Anaheim-based Brewery X looked to initially be the buyer. According to The San Diego Union-Tribune:
Maui Brewing emerged as the favorite potential buyer in June when it was named the stalking horse bidder in the court-supervised auction. After three hours and some 70 bids, however, an affiliate of Anaheim-based Brewery X won the auction, agreeing to pay $20 million for Modern Times. Brewery X included some lofty performance requirements in its bid. It pledged to fully fund the deal within seven days and close within two weeks. Brewery X missed the funding deadline, and when questioned by the receiver, withdrew its bid, forfeiting a $500,000 deposit, according to court documents.
Ouch. The bigger story behind the sale had a lot of interesting twists and turns, if you find auctions, courts and asset purchase agreements interesting. I highly suggest you read this Brewbound article. During the process, Maui Brewing was named the backup bidder by the court. After due deliberation, Maui agreed to buy the company. From the press release:
Maui Brewing Company CEO and Co-Founder, Garrett Marrero, states, “We are now even more excited in the future of Modern Times. The delays were painful for all; however, it was important that we waited until we had made concrete decisions to avoid any further emotional whiplash for our collective teams. We are beyond stoked to be welcoming Modern Times into the Maui ‘Ohana and work together to achieve our fullest potential.”
It will be interesting to see how the story of Modern Times evolves. The brand was in the midst of an aggressive West Coast expansion, focused on satellite locations and on-premise channels, when the pandemic hit. How will its business plan change? The company’s brand halo was also severely diminished after an industry wide MeToo moment that had original founder Jacob McKean stepping down in 2021. Still, the company was the 48th largest craft brewery in 2021 by sales volume, going by the Brewers Association definition of craft. The purchase will give Maui a physical footprint on the West Coast, and it gives the company another brand. From the press release:
MBC [Maui Brewing Co.] is on track to brew 90,000 bbls in 2022; and while the purchase would not provide immediate capacity for all mainland needs, it does allow MBC a platform for future capacity. When paired with the unique synergies of the Hawaii-based company, MBC’s Leadership team believes that Modern Times can and will return as a highly successful and profitable brand. The combined breweries project to produce 125,000 bbls in 2022 which will make the entity the country’s 21s largest craft brewery according to the Brewers Association.
We’ll keep you updated.
[…] is to be acquired by Maui Brewing Co. of Hawaii in a deal worth more than $15 million, according to Craft Brewing Business. The joint venture will be named Craft […]