In early 2018, Tonkon Torp concluded the $205 million sale of the Pendleton Whisky brands by its client Hood River Distillers, Inc. (HRD) to Proximo Spirits, whose international portfolio of spirits includes Jose Cuervo tequila.
HRD was Oregon’s first distillery, and one of Tonkon's original clients. The firm’s founder Moe Tonkon was the first attorney for the fledgling spirits producer. Founding partner Morrie Galen then served as the lead attorney for the company for decades, and upon his retirement, partner Jeff Cronn carried the relationship forward.
After six decades of representing HRD — owned by four shareholder families — Tonkon supported the company’s development of a CEO succession plan, which led to discussions about the company's overall strategic direction and goals. Tonkon Torp helped HRD to obtain and review the opinion of two investment banks to assist in the company's evaluation of options. After this review, HRD determined that the potential sale of the 15-year old Pendleton Whisky brands had the unique potential to return value to the company's shareholders.
The sale of the Pendleton brands portfolio tapped into the full slate of M&A services offered by Tonkon Torp, starting with facilitating a competitive bidding process that drew numerous national and international participants. After HRD selected Proximo as the winning bidder, Tonkon Torp supported the negotiation and documentation of a complex transaction that included tax, corporate and operational structuring, multi-party trademark license negotiations, due diligence support, agreements with respect to transition services, and the agreed terms of bottling services to be provided by HRD to Proximo following the sale.
The 15-month process was led by Cronn, and involved many other Tonkon attorneys who worked on aspects of the deal. Tom Palmer, Claire Brown, and Tyler Harkness played particularly large roles. Throughout the sale process, Tonkon’s attorneys worked diligently to reconcile the views and interests of the HRD shareholders with Proximo, and with Pendleton Whisky trademark co-owners Pendleton Woolen Mills and the Pendleton Round-up.
Cronn sees this transaction as an impressive success story for an Oregon-based family business. He said, “To create and grow the Pendleton brands to a $205 million sale in 15 years is very impressive for a relatively small local business. The shareholding families appointed skilled managers and directors, and committed to a strategic growth plan that ended as a win for all parties. And now Hood River Distillers can apply its skills and relationships to growing other premium spirits brands while continuing to bottle Pendleton Whisky for Proximo.”
Following the sale, HRD continues operations as Oregon's largest distiller and Tonkon Torp remains in its role as lead corporate counsel to the company.