Portland-based Eastside Distilling is in talks with Redneck Spirits Group over selling its shares in Redneck Riviera and stocks of maturing whiskey in a deal worth US$8 million.
Eastside Distilling plans to terminate its amended and restated licence agreement with Rich Marks and the John D Rich Tisa Trust.
It also intends to sell assets including the Redneck Riviera Whiskey, Granny Rich Reserve and Howdy Dew brands, as well a portion of its stocks of maturing Redneck Riviera barrels.
The company expects proceeds in excess of US$8m from the sale, including a non-refundable deposit if Redneck Spirits Group fails to meet certain closing conditions.
The divestiture of Redneck Riviera is said to be in line with Eastside Distilling’s focus on core growth platforms such as craft spirits, cocktails, and mobile canning.
Paul Block, Eastside Chairman and CEO, said: “We are evolving the focus of the company to operate with speed, focus, and discipline, and we will succeed with an aligned mission and vision that focuses the overall company while simultaneously empowering teams and individuals.
“The overall market for craft spirits and canned beverages is expanding, and Eastside will carve out a share of the market that will fulfil our business objectives for growth.
“Today’s announcement helps position the company to further grow our core businesses and unlock value for our shareholders.”
Eastside Distilling has appointed Roth Capital Partners, as its exclusive financial advisor and Harriton & Furrer as legal advisors to assist with the transaction.
Portland-based Eastside Distilling has also announced the preliminary results for its third quarter, with revenue valued between US$4.5 and US$5m. The company expects an improvement in earnings before interest, taxes, depreciation, and amortization (EBITDA) over Q2 2019 and believes it will make further improvements in EBITDA in Q4 2020.
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Author: Owen Bellwood