Transaction Supports Reed’s Strategic Transition to Focus on Sales and Marketing
Gordon Brothers, a global advisory, restructuring and investment firm specializing in the industrial, consumer products and retail sectors, has been retained by Reed’s, Inc. (NYSE American: REED), one of the nation’s leading portfolios of handcrafted, natural beverages, to manage the sale of its Los Angeles, California beverage manufacturing facility and the Reed’s branded candy business.
The project supports the Company’s previously announced plans to streamline its business model and focus on becoming a sales and marketing driven organization with the primary objective of accelerating growth of the Reed’s and Virgil’s core product offerings. Proceeds from the sales process will go toward paying down the Company’s debt position.
“After a thorough strategic review, the board of directors believes that the Company’s business model and profitability would be significantly improved by exiting the manufacturing business and utilizing larger, more efficient co-packers to manufacture our award-winning Reed’s and Virgil’s beverage offerings. In an ideal situation, we would work with the buyer of the facility to continue to supply our West Coast production needs while we focus our attention and resources on sales and marketing to drive growth,” commented Val Stalowir, Chief Executive Officer of Reed’s, Inc.
“We are pleased to be able to offer a comprehensive solution to Reed’s as they execute on their business model transformation. We look forward to working with qualified purchasers of these assets over the coming months,” stated Robert Himmel, Senior Managing Director of Gordon Brothers.
Located at 13000 South Spring Street in unincorporated Los Angeles, California, the plant comprises over 30,000 square feet of manufacturing, distribution and office space. The beverage manufacturing operation is being offered as a fully functional production facility that currently supplies product for the Company’s branded natural beverage business as well as the private label offerings of prominent supermarkets and specialty retailers. Suitable for micro-brewing operations, the facility, which includes both legacy brewing equipment and newly purchased state-of-the-art automated labeling and fill equipment, offers a unique turnkey business opportunity due to its location and unique brewing features.
Over the last two years there have been significant plant upgrades to the water, gas and electrical systems that improve the overall capability of the facility to handle high speed manufacturing and provide a solid foundation for potential other uses for the facility.
Additionally, the proprietary Reed’s branded candy business is being offered for sale in a stand-alone or related transaction. Reed’s ginger based candy offerings that include crystalized ginger and a variety of ginger chews are currently sold to consumers through retailers and internet retail outlets.