Monday, November 15, 2010

Brewpub Consolidation: Rock Bottom and Gordon Biersch Merge

From Jay Brooks I learn of the merger of Gordon Biersch and Rock Bottom into CraftWorks (though the individual brands will remain) which also includes the Old Chicago chain and interestingly "maintains the intellectual property rights to Boulder Beer Company" whatever that means.  This will create a chain of over 200 brewpubs!  Wow.

This could lead to the age old question: is a big chain good or bad for local independents?  In craft beer, I am still inclined to think 'good' as craft beer is an experience good and an acquired taste.  To me, such places are the 'gateway breweries' which do a ton of the educating and experiencing of nascent craft beer fans.

A big question for local Van Havig fans, of which I am one (Van is the head brewer at Portland's Rock Bottom), is whether Rock Bottom will still give the local brewers the independence they now enjoy or whether they will want to try and have them hew more to the corporate ethos.  Which, for example, Oud Heverlee does not.  Still, I think they will at least allow Van to brew an integrity style beer now and then...

Anyway, here is the press release:

Centerbridge Capital Partners, L.P. and its related entities (“Centerbridge”), formed CraftWorks Restaurants & Breweries, Inc. (“CraftWorks”) by closing on concurrent acquisitions of Rock Bottom Restaurants, Inc. (“Rock Bottom”) and Gordon Biersch Brewery Restaurant Group, Inc. (“Gordon Biersch”) today. The companies will operate as subsidiaries of CraftWorks and will retain their brands. The combined business becomes the nation’s leading operator and franchisor of brewery and craft beer-focused casual dining restaurants with nearly 200 owned and franchised locations across the United States. CraftWorks’ primary concepts include Old Chicago, Rock Bottom and Gordon Biersch.

CraftWorks is led by Frank Day and Allen Corey. Frank Day, founder of Rock Bottom, serves as Chairman of the Board and brings over 45 years of restaurant experience to the newly formed company. Allen Corey, an original investor and 13 year CEO of Gordon Biersch, is the President and CEO of CraftWorks and brings over 18 years of restaurant experience to the position.

Regarding the formation of CraftWorks, Frank Day stated, “This merger marks a new era for both Rock Bottom and Gordon Biersch and I am very excited about the growth potential that the future holds for CraftWorks.”

“Gordon Biersch, Old Chicago and Rock Bottom are differentiated casual dining concepts with strong guest loyalty, high energy atmospheres and a high quality offering of craft beer and made-from-scratch food,” stated Jason Mozingo, a Managing Director at Centerbridge. “We are excited by the prospect of partnering with the management teams to strengthen the long-term operating performance of the business and position it for growth.”

Mr. Corey said, “I am honored to have the opportunity to lead the combined company. There is a long-standing relationship between Rock Bottom and Gordon Biersch which will facilitate a smooth and efficient integration of the two businesses. With the help of our new financial sponsor, Centerbridge, we look forward to a successful future as the nation’s leading brewery and craft beer-focused casual dining restaurant operator.”

Gordon Biersch Brewery Restaurant Group, Inc was formerly majority owned by Hancock Park Associates. Rock Bottom Restaurants, Inc. was owned by founder Frank Day and his investment group.

Duff & Phelps Securities, LLC, an affiliate of Duff & Phelps LLC (NYSE: DUF), and North Point acted as the exclusive financial advisors to Rock Bottom and Gordon Biersch, respectively, in connection with this transaction. Faegre & Benson and Miller Martin acted as legal advisors to Rock Bottom and Gordon Biersch, respectively.

Centerbridge was advised by Weil, Gotshal & Manges. Duff & Phelps Securities, LLC, also advised CraftWorks on the acquisition of Gordon Biersch. Wells Fargo and GE Capital were joint-lead arrangers for a $150 million credit facility to support the transaction.

There are no plans for re-branding or closing any units at this time.

About CraftWorks

CraftWorks Restaurants & Breweries, Inc., through its three principal operating units, Old Chicago, Gordon Biersch and Rock Bottom, is the nation’s leading operator and franchisor of craft beer-focused casual dining and brewery restaurants with nearly 200 owned and franchised locations across the United States. CraftWorks also operates strong regional brands, including ChopHouse and Big River and maintains intellectual property rights to the Boulder Beer, Inc. microbrewery. The company maintains dual headquarters in Chattanooga, TN and Louisville, CO. For additional information, please visit www.craftworksrestaurants.com

Portland does not have a Gordon Biersch, but I have been to the one in Palo Alto, California and, unlike NW brewpubs, they concentrate on very nicely done lagers so I would actually welcome one in PDX, though I'd rather see the Heater-Allen pub than a chain.  But I do loves me the lagers.

1 comment:

P said...

Nice job bringing this info to the beerly-inclined.

I myself am a fan of the Rock Bottom at Park Meadows in Colorado, and am currently enjoying football and beer at an Old Chicago locale.

I asked our lovely bar wench if the prices of the individual pizzas increased and she answered "yes, within the past two weeks - and we weren't told why, nor were we given any notice." "They just changed the menu and - Bingo - higher prices. Maybe it has something to do with the merger, she added."

This piqued my curiosity, but all she knew about the merger was the name 'Gordon', so I Googled it, got the skinny, and here I am.

One phrase in the Press Release caught my attention, and unfortunately I don't think it bodes well for those of us who are the mainstay of these fine establishments.

“We are excited by the prospect of partnering with the management teams to strengthen the long-term operating performance of the business and position it for growth.”

As a management consultant for twenty years I recognize this as a euphemism for 'we're gonna milk this bitch for every last dime and tear the soul out of it in the process, then flip it to an even larger (and even more soulless) organization, like Apple-bee's.

During this economy, and political regime, they'd better not take their loyal base (or any customers for that matter) for granted.

I hope I'm wrong, but I've seen it (and, sadly, facilitated it) enough that I'm saddened by the prospect.

Enjoy it while it lasts - and the Holidays!
Cheers,
Paul