SAN FRANCISCO – Napa-based wine e-commerce conduit Inertia Beverage Group acquired the assets of Napa-based wine order fulfillment provider New Vine Inc. for $4.5 million in a foreclosure auction sale here today.
The opening bid from Inertia, the senior debt holder for New Vine, was the only one entered in the closed auction at a law firm office this morning, according to Inertia President and Chief Executive Officer Ted Jansen. Four other registered bidders attended the auction but didn't bid.
"When the auction closed, we started executing our integration plan," Mr. Jansen said. "We're working with New Vine employees this afternoon for their employment to terminate with New Vine and become Inertia employees."
New Vine currently has 40 to 50 employees, but likely the operation will need more in September as the wine-shipping season starts for the year-end holidays, he said.
Inertia became the lead debt holder of New Vine in a deal with Silicon Valley Bank and injected money into New Vine to reopen the business after an early June shutdown. Inertia has put about $1 million into New Vine so far, according to Mr. Jansen.
Inertia and subordinate debt holder Montage Capital LLC called for a bulk foreclosure auction, originally set for July 14. The auction was moved to today because the 10 registered bidders asked for more time to evaluate New Vine assets for sale.
"This outcome ensures that Inertia Beverage Group will be able to service New Vine's former clients on an uninterrupted basis, resulting in even greater opportunities for customers, the direct sales channel, and the wine industry as a whole," Mr. Jansen said in a statement. "The acquisition of these assets deepens Inertia Beverage Group's long term commitment to providing access to consumer and trade markets through a comprehensive suite of products and solutions designed to enable online wine marketplaces."
Inertia said it would provide further details of the integration in coming days and weeks, including working with vendor agreements that won't automatically transfer to Inertia.
Today's foreclosure auction transferred the bulk of New Vine assets to Inertia but not the New Vine entity itself.
"Inertia Beverage launches direct-to-trade shipments," North Bay Business Journal, July 27, 2009
"Inertia wants New Vine to survive," North Bay Business Journal, July 18, 2009
Inertia Beverage Group