IBG Funding - Investor Update From CEO Jansen
Several investors in Inertia Beverage Group sent Wine Industry Insight the following email update they received from Ted Jansen, President and CEO.
The email is being reproduced in its entirety with Jansen’s permission.
Sent: Tuesday, January 26, 2010
Subject: IBG - Investor Status Update
Dear Investor –
The purpose of my note is two-fold – 1) to provide you a short update on our financing activities and the upcoming stockholder rights offering; and, 2) to thank you for your patience and understanding as we navigate through the financing process.
Given the combination of IBG bank relationships, financial details associated with the purchase of New Vine assets and the historical positions of our equity investors, the deal constructed was fairly complicated and difficult to execute, especially considering the current capital markets. Due to those conditions, the financing terms and process has had more fluidity to it than we would have liked, and it has been difficult to align the interests of all stakeholders. Still, we have done our best to ensure that all our equity investors have the right to participate in the financing at like terms to our lead equity investors.
One of the by-products of the continued negotiations is the fact that due to our cash position we had a fairly short consent window, exacerbated by some subsequent amendments that placed a rapid review and consent request upon you. For that I would like to apologize. In the coming weeks, you will receive significantly more detail in a shareholder rights offering, which will provide you information about the financing deal and your rights associated with it. As part of that offering, you will have adequate time to review and consider the terms and the opportunity to engage with either me or our CFO to ask questions related to the financing or company performance. The dates and timeline are still being worked out, but we will have more information related to that schedule to you in the days ahead.
Over the past few months, I have had the opportunity to speak and/or trade emails with several investors about our attempts to finance the company, and as I write this I am pleased to say we are in the midst of executing the first close of this deal. Through this continued support, IBG is pursuing investments in its core services – ecommerce, compliance and fulfillment – that create direct-to-market capabilities that no other company in the industry can match. As a result, wineries are listening and beginning to sign up. Just last week, we executed the two most valuable contracts in IBG history with respect to revenue, including our first cornerstone account that brings several wine brands and significant volume to IBG. I cannot release names of those accounts just yet, as they have not yet informed their current providers, but we expect the momentum that these accounts provide us will propel us forward as a company.
I also want to express my appreciation for your patience of the financing process we are pursuing. It has been quite the journey for all involved, but I am excited more than ever about our prospects as a company. Our successes now are more tangible than ever before and we remain firm believers that we will have significant positive impact on our customers’ ability to sell wine direct vastly improving their underlying economics – and in turn the value of our company.
As always, please feel free to contact me should you have any questions. Otherwise, please be on the lookout for the shareholder rights offering in the coming weeks.
Best regards,
Ted
Ted Jansen | President and CEO
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About The Editor
WII Editor Lewis Perdue
is a former Washington, D.C. investigative reporter and has written 20 published books. He founded Wine Business Insider in 1991 followed three years later by Wine Business Monthly. Both were sold in 1997, but remain the dominant trade publications for the North American wine business. In 1997 he became a correspondent for CBS Marketwatch and a columnist for The Street.Com. Later, he worked as a columnist for the Wall Street Journal Online before founding an Internet payments company which went public. He has also been a negociant and a wine importer/distributor. Click here for more on Lew.