Private & Confidential For more information contact:
Susan Vick, President
ACCESS GLOBAL CAPITAL, LLC susan@[Link]
,QYHVWLQJLQ7RPRUURZ¶V:RUOGTM (713) 600-8853 office (713) 594-2838 mobile
TRANSACTION SUMMARY
byejoeTM is creating an entirely new spirits category in the US market and launching a true, super
ƉƌĞŵŝƵŵ͞baijiu͟ʹ the most consumed liquor on the planet, yet hardly known in the US.
dŚĞĐŽŵƉĂŶLJŝƐůĞĂĚŝŶŐ ĂΨϱDD͞^ĞƌŝĞƐ͟ŝŶǀĞƐƚŵĞŶƚƌŽƵŶĚƚŽĨƵƌƚŚĞƌƌĞĨŝŶĞƚŚĞƉƌŽĚƵĐƚ͕ŝŶŝƚŝĂƚĞĂŶĚƐĐĂůĞƉƌŽĚƵĐƚŝŽŶ͕ŽƉĞŶ target
markets and gain initial adoption. Based on industry historical standards and recent exits, management projects the Company becomes an
attractive acquisition target to multinational spirits companies starting in Year 2, with correlative valuation in the range of 3-‐6 x.
THE LEGENDARY PRODUCT ± ³%$,-,8´
Baijiu is a traditional Chinese spirit distilled from fermented sorghum, and has been a pillar of Chinese social and business culture for thousands of
years. Baijiu is the most frequently consumed liquor by volume in the world, totaling 1.1B cases annually sold to the 1.3B Chinese population.
byejoe has created a purified formulation as well as exciting flavors, specifically designed for American taste and aims to take advantage of the
growing market for premium spirits and cocktails in the US and China while filling the gap for the product in the US for Chinese consumers.
INVESTMENT RATIONALE
Baijiu͕ƚŚĞǁŽƌůĚ͛ƐŚŝŐŚĞƐƚŐƌŽƐƐŝŶŐůŝƋƵŽƌďLJĐŽŶƐƵŵƉƚŝŽŶ͕ ŝƐůĂƌŐĞůLJƵŶŬŶŽǁŶ ŝŶƚŚĞhŶŝƚĞĚ^ƚĂƚĞƐĂŶĚƌĞƉƌĞƐĞŶƚƐĂŶƵŶƚĂƉƉĞĚ ŵĂƌŬet for consumers
seeking alternative spirits and cocktails, as well as providing consumers in the US a traditional Chinese spirit.
Experienced Management Team, with a combined 50+ years of liquor industry and Asian regional expertise together have built a detailed sales, marketing
and execution plan to complete a flawless launch of byejoe in the US and abroad.
Strategically positioned to create the first Western-‐branded, flavored Chinese spirit targeted at mainstream US consumers, then re-‐introduce the product in
China to capture a healthy share of the $40.1B baijiu market.
New brand market entry requires heavy marketing in initial phases, creating low levels of profitability for the first few years. Companies are highly rewarded
ĨŽƌƚŚĞƐĞĞĨĨŽƌƚƐůĂƚĞƌ͕ƚŚƌŽƵŐŚŚŝŐŚŵƵůƚŝƉůĞƐŐŝǀĞŶďLJDƵůƚŝŶĂƚŝŽŶĂů^ƉŝƌŝƚƐŽŵƉĂŶŝĞƐ;͞D^Ɛ͟ͿŝŶƚŚĞĂĐƋƵŝƐŝƚŝŽŶƐŽĨƚŚĞbrands.
Starting in Year 2, with demonstrated, rapidly increasing, annual cases sold and 50-‐60% gross margins, byejoe will be an attractive acquisition target to be
acquired by an MSC for $38MM-‐242MM (using conservative valuation projections of $1000/case).
byejoe675$7(*<
In the spirits industry, a symbiotic relationship exists between the Multinational Spirits Companies (MSCs) and entrepreneurs building
small brands. The MSCs prefer to acquire growing brands that are performing well with proven adoption, as opposed to building new
brands from scratch. Once acquired, MSCs grow them exponentially through their own distribution networks. Historically proven, a
clearly defined exit strategy and path to liquidity has been established for entrepreneurs within the spirits industry.
byejoe intends to capitalize on the large demand for unique spirits in the United States by introducing a pure version of baijiu, the
largest selling spirit in the world, that is specifically tailored to the American palate. byejoe will be initially distilled in China and brought
to the United States for further refinement to deliver the highest quality of spirit possible and add unique flavors to cater to the growing
flavored spirits segment. Once launched in the U.S., the Company intends to introduce the product in China to capitalize on the Chinese
ĐŽŶƐƵŵĞƌƐ͛ affinity for Western brands and capture a share of the $40B, 1.1 billion case per year market for baijiu in China.
The seasoned management team will introduce the brand and grow awareness by targeting much of its marketing through high end
restaurants, bars, and clubs. byejoe plans to build a following for its product by allowing consumers to experience a Chinese spirit along
with Pan-‐Asian and Asian fusion cuisine, which is 2nd largest ethnic food category in the US growing 39% between 2005-‐2010 versus 13%
growth in the rest of the industry. This marketing model has been proven effective by the explosion of tequila sales surrounding the
proliferation of Mexican cuisine in the U.S. and the growth of sake through marketing pushes in Japanese restaurants.
After establishing itself in the U.S. and China, byejoe plans to exit through the sale of the brand to a MSC or Chinese distributor. The
Company believes that it will be a very attractive target for an MSC because of its unique product in the United States and the potential
for market entry to access ŚŝŶĂ͛Ɛ 1.3 billion consumers as a new distribution channel.
Acquisitions in the spirit space are valued on a per case basis. The following table shows the projected acquisition price of the
Company based on the ŽŵƉĂŶLJ͛Ɛ sales projections and a conservative multiple of $1000 per case (the market average over the past
five years is in excess of $3,500 per case for niche premium spirits).
Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
9L Cases Sold 38,218 91,148 159,721 242,610 340,793 480,130
Acquisition
$38,218,000 $91,148,000 $159,721,000 $242,610,000 $340,793,000 $480,130,000
Price
CONFIDENTIAL: This Document does not constitute an offering of securities. It has been prepared for the sole use of initially introducing the Offering to
prospective investors. Any offering of securities may be made only in connection with the delivery of Offering Materials prepared for the purpose of soliciting
investment interest from prospective investors.
EXECUTION PLAN
1. Complete first financing round
Capital required to start production, enhance distribution network and
launch in initial markets.
2. Soft launch byejoe in a mid-‐size market
Working with strategic distributor to conduct a 4-‐month soft launch in
Austin, Texas to optimize roll-‐out and flavor development strategy.
3. Launch product in four larger markets
Targeted launch in four market areas based on optimal demographics.
4. Complete second round of funding for nationwide rollout
Additional funding will allow for an aggressive marketing campaign to
introduce product in all U.S. major markets.
5. Exit through sale to Multinational Spirit Company or IPO
red
Once the brand is established, byejoe will be poised to be an attractive First launch only byejoe ͞Z͟ʹ the original
acquisition target for a larger spirits company. Follow with flavored line extension
&ŝŶŝƐŚǁŝƚŚĂŶhůƚƌĂWƌĞŵŝƵŵŽƉƚŝŽŶ;͞'K>͟Ϳ
INDUSTRY COMPARABLES & HISTORIC ACQUISTIONS/EXITS
Price Paid USD
Brand Purchaser Year Cases at Purchase (000) % of Brand Price Paid/Case
(million)
Niche Brands
Skinny Girl Beam Global Spirits 2011 90 $100 100% $1,111
Zacapa Rum Diageo 2010 85 $225 50% $5,294
Agua Lucca Heaven Hills Distillers 2007 3.5 $13 100% $3,714
Leblon Bacardi 2007 8.0 $15 30% $6,250
42 Below Vodka Bacardi 2006 60 $91 100% $1,514
Established Brands
Absolut Vodka Pernod Ricard 2008 10,700 $8,100 100% $757
Ketel One Diageo 2008 1,800 $750 50% $833
Three Olives Vodka Cuervo 2007 630 $400 100% $635
Chambord Brown Forman 2006 212 $225 100% $1,061
Grey Goose Bacardi 2004 2,660 $2,300 100% $865
MANAGEMENT TEAM
Matt Trusch, President and CEO: Executive with vast experience and expertise in China and the Asia Pacific Region. Chairman of The Longevity
Group, a business and financial consultancy practice focused exclusively on China. Former CEO of a NY real estate developer in China. Prior
experience also includes Merrill Lynch Asia investment banking, corporate finance. Masters in China Studies from Harvard University (Merit
Scholarship, Traveling Scholar, Fletcher Prize); Bachelors in Asian Studies and International Relations (Government, Honors) from Dartmouth
College (Presidential Scholar, Magna Cum Laude, Phi Beta Kappa), and advanced studies at the London School of Economics, Harbin Institute of
Technology and Beijing Normal University. Matt has studied Chinese language, history and culture for over 25 years.
Silvio A. Leal, Managing Director and COO: Seasoned executive with over 25 years experience in the wines and spirits industry. Successful
executive of Seagram Company LTD, ultimately serving as the Managing Director of Latin America. With over 16 years tenure with ^ĞĂŐƌĂŵ͛Ɛ͕
Silvio excelled in managing sales, marketing, distribution channels and overall business operations domestically and internationally. Formerly
the Latin America, Managing Director with Allied Domecq PLC. Experienced launching new brands and brand turnarounds; he led the complete
turnaround of cash-‐strapped organization, The Matusalem Rum Company, also securing a major investment from a large MSC (over $20mm
invested), then re-‐launching the brand in the US and EU.
FINANCIAL PROJECTIONS
YEAR 1 * YEAR 2 * YEAR 3 * YEAR 4 * YEAR 5 YEAR 6 YEAR 7 YEAR 8
Volume USA (9 Ltr) 6,026 21,218 43,148 64,721 90,610 117,793 153,130 199,070
Volume China (9 Ltr) -‐ 15,000 40,000 80,000 132,000 198,000 297,000 445,500
Volume ROW (9 Ltr) -‐ 2,000 8,000 15,000 20,000 25,000 30,000 35,000
TOTAL VOLUME 6,026 38,218 91,148 159,721 242,610 340,793 480,130 679,570
SALES $ 979,968 $ 5,949,072 $ 14,071,370 $ 24,487,225 $ 37,073,954 $ 51,928,431 $ 72,958,698 $ 102,987,557
GROSS PROFIT $ 484,377 $ 3,014,431 $ 7,379,305 $ 13,415,813 $ 21,221,475 $ 30,384,181 $ 43,593,637 $ 62,782,782
Advertising & Promotion $ 2,577,120 $ 5,227,208 $ 7,947,072 $ 9,613,036 $ 12,013,875 $ 14,944,519 $ 19,103,982 $ 25,099,444
Net Brand Contribution $ (2,092,743) $ (2,212,777) $ (567,767) $ 3,802,778 $ 9,207,600 $ 15,439,663 $ 24,489,655 $ 37,683,338
SG&A $ 613,888 $ 2,126,671 $ 2,689,894 $ 2,734,766 $ 3,016,762 $ 3,328,259 $ 3,672,383 $ 4,052,601
EBITDA $ (2,706,632) $ (4,339,448) $ (3,257,661) $ 1,068,012 $ 6,190,838 $ 12,111,404 $ 20,817,271 $ 33,630,737
Note: * represents potential acquisition period
CONFIDENTIAL: This Document does not constitute an offering of securities. It has been prepared for the sole use of initially introducing the Offering to prospective investors. Any offering of securities may be
made only in connection with the delivery of Offering Materials prepared for the purpose of soliciting investment interest from prospective investors.
