Napa-based wine services firm Inertia Beverage Group acquired the assets of troubled wine storage and shipping company New Vine Logistics in an auction Monday.
Inertia paid $4.5 million for the assets but not the massive debt of New Vine, one of the largest and most sophisticated direct-to-consumer wine shipping firms in the nation.
The deal will create a combined company that will keep New Vine operations going and create significant growth opportunities for Inertia, said Ted Jansen, chief executive officer of Inertia.
This outcome ensures that Inertia Beverage Group will be able to service New Vines former clients on an uninterrupted basis, resulting in even greater opportunities for customers, the direct sales channel, and the wine industry as a whole, Inertia said in a statement.
Inertia helps wineries sell direct to consumers, restaurants and retailers. The company builds and operates Web sites, provides software for online transactions and offers direct shipping. It has about 300 customers.
Founded in 2001, New Vine Logistics developed technology and systems that enabled wineries and online retailers to ship directly to consumers in 44 states. New Vine served about 250 winery customers from a massive, high-tech warehouse in American Canyon.
But New Vines debt load was massive. The company expanded in anticipation it would handle online wine sales for Amazon.com, Jansen said. That partnership was in the testing phase when New Vines backers pulled the plug on funding.
Were hopeful and confident well be able to work out a relationship with (Amazon), Jansen said.
Inertia tapped existing and new partners for the venture capital it needed for the acquisition.
It pumped more than $1 million into New Vine Logistics in June, helping it resume operations after the company shut down and reduced its 110-employee workforce to a skeleton crew.
It replaced Silicon Valley Bank as the companys lead creditor, buying the banks debt position in New Vine. Inertia was scheduled to auction New Vines assets on July 14 but postponed the sale for two weeks to give bidders more time to evaluate its assets.