After filing for bankruptcy in June, BarFly Ventures LLC announced it has sold its assets to Congruent Investment Partners and Main Street Capital.
Congruent and Main Street won with a bid of $17.5 million, acquiring the assets through a new operating company, Project BarFly LLC.
Both companies focus on investing in growth-oriented small businesses across the U.S. and were previously lenders to the company dating back to 2015.
“We know the business extremely well from our experiences over the last five years. We strongly believe in each restaurant concept and intend to return the company’s focus to providing a unique, best-in-class customer experience,” said Travis Baldwin, founder of Congruent Investment Partners. “Our goal is to focus efforts around the company’s key markets and ensure HopCat, Stella’s and Grand Rapids Brewing Company remain a thriving part of these communities.”
Since filing for Chapter 11 bankruptcy, BarFly has focused on reopening the current 11 locations, addressing the unique challenges of the COVID-19 pandemic and finding new ownership.
“Over the last several months, the home office support team, general managers and restaurant team members have worked hard to reopen the restaurants and stabilize the company,” said Ned Lidvall, Project BarFly CEO. “The company has continued to improve operating results in a difficult environment by focusing on keeping our team and guests safe, improving our off-premise sales and reconstructing our business as the marketplace expands and allows.
“The whole management team and I are very excited about the new owners. We think it’s a great fit for the company, and the energy and collaboration they bring will only enhance our recovery and growth. We are also thankful for our loyal guests and teammates — and vendor and landlord partners who have been working hard to make our progress possible.”
Prior to filing for bankruptcy, the company was rapidly expanding to new cities and states with the goal of maintaining growth through 2021. Then, COVID-19 hit. The Michigan Restaurant and Lodging Association reported in mid-September that 74% of Michigan operators don’t expect their restaurant’s sales to return to pre-COVID levels within the next six months.
“HopCat, Stella’s and Grand Rapids Brewing Company are important to both Grand Rapids and the state of Michigan,” said Nick Meserve, managing director of Main Street Capital. “We intend for these restaurants to succeed and very much believe the company can return to growth as the pandemic subsides. This is much-needed good news for the local community and restaurant industry as a whole.”
With sales down and seating restricted due to COVID-19, the company is focusing on off-premise sales and restoring hours of operations across all locations.