March 1, 2023

Bankruptcies Spike

US Bankruptcy Filings Surge At Fastest Pace Since 2009

by Tyler Durden

Wednesday, Mar 01, 2023 – 07:45 AM

For the past year, both the Biden White House and the Fed have been desperate to usher in a (mild) recession in the US to break the back of runaway inflation and the wage-price spiral with little success. But judging by the surge in bankruptcy filings, they are about to get their wish.

One month ago, when looking at the recent pace of large bankruptcy filings (those with more than $50MM in liabilities), we noted a troubling trend: in the first month of the year, the number of US bankruptcies topped 20, the highest in any other January dating back to 2010. Back then, 25 filings were seen as the economy was still reeling from the aftermath of the GFC.

The spike in defaults was not a fluke, and according to Bloomberg data, one month later – as of the end of February – no less than 39 large companies had filed for bankruptcy in the US so far this year, as February’s pace matches that of January; the YTD total represents the fastest pace of companies filing for bankruptcy since the immediate aftermath of the global financial crisis in 2009. By comparison, US bankruptcy courts had seen 63 large filings at this point in 2009.

Last week’s seven large filings — those tied to at least $50 million of liabilities — include the liquidation of generic drugmaker Akorn and the Chapter 11 filing of Covid-19 testmaker Lucira Health

This year, some of the most notable bankruptcy filings have been festive retailer Party City Holdco Inc, mattress maker Serta Simmons Bedding LLC, and cryptocurrency lender Genesis Global Holdco. 

The pile of dollar-denominated corporate bonds and loans in the Americas trading at distressed levels rose to $237.2 billion in the week ended Friday, about a 1.63% increase from $233.4 billion a week earlier, according to BBG data.

Some more details from Bloomberg:

• The US accounts for the greatest volume of distressed debt in the Americas

• The media sector had the greatest amount of distressed debt as of the latest week

• Bausch Health Cos. had the most distressed debt outstanding of any issuer as of Feb. 17, data compiled by Bloomberg shows

https://www.zerohedge.com/economics/us-bankruptcy-filings-surge-fastest-pace-2009

February 13, 2023

Holcim Makes Another Acquisition

Holcim Acquiring Duro-Last in $1.29 Billion Agreement

The Swiss company makes another major acquisition to solidify its presence in North America’s roofing market

By Chris Gray

February 7, 2023

Holcim is further expanding its presence in North America with the acquisition of roofing systems manufacturer Duro-Last for $1.29 billion.

The Michigan-based Duro-Last currently employs around 840 workers and has an annual sales of roughly $540 million. The deal is expected to complement Holcim’s integrated roofing offerings, with expected synergies of $60 million per year.

“I’m excited to welcome Duro-Last into Holcim’s broad range of innovative and sustainable building solutions,” said Holcim CEO Jan Jenisch in a release. “Duro-Last is a perfect strategic fit for our roofing business. Its proprietary technologies and leading brands complement our offering in the fast-growing North American market. Its energy-efficient systems and excellence in recycling will further advance our leadership in sustainability.”

The acquisition is one of the largest deals Holcim has made in North America. In early 2022, it acquired Malarkey Roofing Products for $1.35 billion. Holcim also acquired Firestone Building Products in April 2021.

Duro-Last’s systems include cool roofs, enhancing buildings’ energy efficiency and its award-winning “Recycle Your Roof” program, which drives circularity in roofing. Duro-Last is the first company in the U.S. to offer third-party verified environmental product declarations for its thermoplastic roofing solutions.

“Over the past 45 years, our family business has continually reinvested in Duro-Last to create the solid, financially strong and well-recognized company we are today,” said Tom Saeli, CEO of Duro-Last, in a release. “We are delighted to be joining the Holcim family, which shares our core values, and we look to the future to accelerate our success. Holcim recognizes the opportunities at Duro-Last and we are confident it will support us in our future growth plans.”

Holcim expects its roofing systems will exceed $4 billion in net sales ahead of schedule. This acquisition advances Holcim’s “Strategy 2025 – Accelerating Green Growth” with the goal to expand its Solutions & Products business to 30% of Group net sales by 2025. The Duro-Last acquisition is expected to close by the second quarter of 2023.

https://www.roofingcontractor.com/articles/97911-holcim-acquiring-duro-last-in-129-billion-agreement

January 25, 2023

Serta Simmons Files for Chapter 11

Serta Simmons Files for Bankruptcy Amid Financing Controversy

1

Amelia Pollard and Luca Casiraghi

Tue, January 24, 2023 at 2:54 PM EST·4 min read

(Bloomberg) — The emergency funding that Serta Simmons Bedding received during the pandemic triggered a blowback that the company is still struggling to recover from.

The mattress manufacturer filed for bankruptcy on Monday, after clashes with lenders including Apollo Global Management Inc. left it with no other options for cutting its debt load while grappling with an economic slowdown that is crimping sales. Serta said the Chapter 11 filing will allow it to continue operating while it fixes its balance sheet, cutting debt to $300 million from $1.9 billion.

When the pandemic was raging in 2020 and the US economy had broadly shut down, Serta Simmons got $200 million of rescue financing to help it stay in business. The funding came from a group of lenders including Eaton Vance and Invesco Ltd., and featured a twist: the firms would be among the first in line to get repaid if the company failed.

Lenders excluded from that financing, including Apollo and Angelo Gordon & Co., responded by suing, arguing that other creditors had violated lending agreements by jumping ahead of them in the line to be repaid. Litigation tied to the transaction is still going on.

The mattress maker, assembled over a decade by private equity firms, faced heavy debt maturities this year. Alongside its Chapter 11 petition, Serta filed a lawsuit asking its bankruptcy judge to bless the 2020 financing that triggered litigation. Settling the fight over that deal is “critical” to the mattress maker’s restructuring, the company said in its lawsuit. The company’s planned deal is backed by a majority of lenders and shareholders.

Plan Details

The Serta litigation was the beginning of a series of clashes between lenders and companies with heavy debt loads that were struggling to navigate the pandemic. Creditors said that companies were pitting lenders against one another to get cheaper funding, and were hurting investors in the process.

Now Serta is trying to fix its financial difficulties with a bankruptcy plan that calls for repaying high-ranking lenders with new debt and stock in the restructured company, court papers show. Holders of more than $830 million of so-called first-lien-second-out debt are slated to get most of the company’s equity.

Loans pushed back in the repayment line in 2020 — more than $860 million of debt — would get a single-digit share of the stock in post-bankruptcy Serta. The plan also calls for paying the company’s continuing vendors in full, as long as they agree to favorable trade terms.

Nearly all of its top unsecured creditors are suppliers, with the top one listed owed more than $17 million, the filings show. The plan requires bankruptcy court approval and could change.

The creditor group has agreed to provide $125 million in the form of an asset-based loan to help the company fund itself in bankruptcy. Serta has also secured a commitment of $125 million in the same form once it exits bankruptcy.

The firm listed assets of $1 billion to $10 billion and liabilities in the same range in its petition. The company’s debt, which stems from a roughly $3 billion leveraged buyout by Advent International in 2012, has hobbled the retailer. Confidential talks over a restructuring plan started late last year, Bloomberg earlier reported.

Serta is working with advisers Weil, Gotshal & Manges, Evercore Group and FTI Consulting, according to the statement. Gibson Dunn & Crutcher and Centerview Partners are advising creditors, while Ropes and Gray are working with Advent.

Joining Forces

The mattress giant’s start can be traced back to the 1870s along the shores of Lake Michigan. There, Simmons first started producing coil spring mattresses, John Linker, the company’s chief financial officer, said in court papers.

The firm grew over the next century until it filed for bankruptcy during the fall-out of the financial crisis. Soon after, the firm combined with competitor Serta to establish the new company, Serta Simmons. In 2018, the company acquired Tuft & Needle, a maker of mattresses that get packaged in boxes and shipped directly to consumers’ homes.

Today, the firm is one of the largest mattress companies in the US, accounting for 19% of annual bedding sales, according to court papers. It operates 21 manufacturing facilities across the US and Canada and sells mattresses at 2,200 independent retailers.

But selling mattresses has grown more difficult, according to Serta. Rising interest rates have weighed on consumer spending, and the company has faced higher raw material costs and supply chain disruptions.

The case is Serta Simmons Bedding LLC, 23-90020, US Bankruptcy Court for the Southern District of Texas.

https://www.yahoo.com/now/mattress-maker-serta-simmons-files-044757930.html

January 24, 2023

Mearthane Recapitalization

Alantra advises Mearthane Products Corp. on a recapitalization by Compass Group Equity Partners

SECTORIndustrials

ServiceM&A

Dec 2022https://www.alantra.com/ib-transaction/mearthane-products-corporation-sell-side-advisory-compass-group-equity-partners/

Sell-side advisory

Boston – Alantra, a leading global investment bank and asset management firm, is pleased to announce that Mearthane Products Corporation (“MPC”), a leader in proprietary, branded urethane-based technology, has been recapitalized by Compass Group Equity Partners (“CGEP”). The deal closed on December 23, 2022, and financial terms were not disclosed.

Founded in North Providence, Rhode Island, in 1965, MPC is a leader in the development and manufacture of polyurethane elastomers with a specific focus on advanced thermoset products for use in high performance applications. With an emphasis on urethane technology, partnership, quality, and community, MPC produces high performance parts including belts, rollers, wheels, seals, and enclosures for diverse end markets such as medical & analytical testing, digital printing, vehicle platforms, and sports & recreation.

“We are very pleased with Alantra’s teamwork and guidance throughout this process,” said Kevin Redmond and Peter Kaczmarek, the shareholders of MPC. “Alantra was a committed advisor from start to finish, and clearly delivered on our objective of finding a partner for the next chapter of growth for MPC.”

Paul Colone, Managing Director & Partner with Alantra, said, “We are very pleased to deliver on the MPC shareholders’ objectives to form a new partnership to support their active pipeline of M&A and organic growth opportunities. We have a very active practice in Specialty Materials and MPC meets the definition in every respect due to their focus on developing technical solutions for high performance applications.”

Alantra Director Jon Tetirick continued, “MPC has found an excellent partner in CGEP and we look forward to following the new owners as they continue to execute on MPC’s M&A add-on strategy in what is sure to be an exciting and rewarding future ahead.”

MPC represents another strong credential supporting Alantra’s expertise with Specialty Materials and Industrials. In addition to Mr. Colone (Boston), and Mr. Tetirick (Boston), the Alantra team advising MPC included Sam Worley (Associate, Boston), and Alif Kanji (Analyst, Boston).

www.alantra.com/what-we-do/investment-banking/transactions/?sector=industrials

Read more here: https://www.cgep.com/news/2023/compass-group-announces-strategic-partnership-with-mearthane-products-corporation

January 12, 2023

Univar Discussions

Univar gains amid report about interest from PE firms Apollo, Platinum

Jan. 11, 2023 3:17 PM ETUnivar Solutions Inc. (UNVR)APO, BNTGFBy: Joshua Fineman, SA News Editor1 Comment

Univar Solutions Inc. (NYSE:UNVR) rose 3.4% amid a report that private equity firms including Apollo Global (APO) and Platinum Equity may be interested in a takeover of the US chemical distributor.

The PE firms are evaluating offers and potential buyers are holding discussions with Univar (UNVR) this month, according to traders, who cited a Bloomberg report. The talks are early and Univar hasn’t decided if it will sell itself.

The report comes after Brenntag (OTCPK:BNTGF) last Monday said it ended talks to acquire rival chemical distributor Univar (UNVR).

Univar indicated last Monday that it will continue talks relating to other indications of interest that have been received with respect to a potential transaction. Univar (UNVR) is said to have received takeover interest from multiple strategic buyers valuing the company at around $40/share, according to a Street Insider report at the time.

In late November activist Engine Capital, which disclosed it had a ~1% stake in Univar, said the company should start a competitive sales process that invites additional parties to bid for Univar besides Brenntag.

Engine Capital highlighted a letter it sent to Univar’s board in October and estimated that Univar (UNVR) may be worth $38-$44/share in a takeover.

https://seekingalpha.com/news/3923877-univar-gains-amid-report-about-interest-from-pe-firms-apollo-platinum