JACKSONVILLE, Fla.,
Nov. 8, 2019 /PRNewswire/
-- Acosta, Inc. ("Acosta" or the "Company"), a full-service
sales and marketing agency, today announced that it has reached an
agreement with more than 70% of its lenders and more than 80% of
its noteholders, each by principal amount, on the terms of a
comprehensive reorganization and recapitalization. The deal
will eliminate all of the Company's approximately $3 billion of long-term debt. Further,
investors have committed $250 million
in new equity capital backstopped by institutions committed to the
long-term success of Acosta.
"This is a very positive development for Acosta and our
employees, clients, customers and other business partners," said
Darian Pickett, CEO of Acosta.
"Through this strategic step, Acosta will be well-positioned, both
operationally and financially, to make critical investments in our
business and drive sales and market penetration for our clients and
customers. Our business remains fundamentally strong, and we
are pleased that our new investors recognize the long-term value
Acosta can create for our clients and customers. We all are
excited about what the future holds for Acosta."
CONTINUITY OF SERVICE
Acosta's "pre-packaged" Chapter 11 Plan of Reorganization (the
"Plan"), described in greater detail below, provides that vendors
will be paid in full for goods and services provided before and
during the Chapter 11 process, and all employees can expect to
receive their usual wages and benefits.
"This process will enable us to continue to operate our business
without disruption to clients, customers, employees, and business
partners," said Mr. Pickett. "Our number one priority always
has been to help drive long-term growth for our clients and
customers and ensure they are well-equipped to succeed in the
competitive consumer landscape. We look forward to doubling
down on this commitment by reinvesting in our people and our
capabilities across all retail channels."
Mr. Pickett added, "I would like to thank all of our valued
employees, clients, customers, and business partners for their
ongoing support."
TERMS OF THE RESTRUCTURING AGREEMENT
The agreement provides for a conversion of all of Acosta's bank
and bond debt into equity, an infusion of $250 million in cash, and full satisfaction of
other unsecured obligations in the ordinary course of
business. After the restructuring and recapitalization, on a
pro forma basis, Acosta will have zero net interest burden and
remain significantly cash flow positive with ample liquidity and
working capital. The Company will emerge with the strongest
balance sheet in the industry.
Acosta and its lenders have agreed to implement the
restructuring through the "pre-packaged" Plan. Accordingly,
Acosta and its U.S. affiliates intend to file voluntary Chapter 11
petitions in the coming weeks. Acosta's non-U.S. subsidiaries
and affiliates are not expected to be included in the upcoming
filing or affected by the Chapter 11 process. Having already
received support for the Plan from a supermajority of both its
lenders and noteholders, the Company expects to complete the
restructuring process quickly.
Kirkland & Ellis LLP is acting as legal counsel for the
Company, PJT Partners, Inc. as financial advisor, and Alvarez &
Marsal as restructuring advisor. Davis Polk & Wardwell LLP is acting as legal
counsel for an ad hoc group of lenders and Centerview Partners is
acting as financial advisor. White & Case LLP is acting
as legal counsel for certain supporting creditors. Sullivan
& Cromwell LLP is acting as legal counsel for certain other
supporting creditors.
About Acosta
Acosta is the sales and marketing powerhouse behind most of the
trusted brands seen in stores every day. The company provides a
range of outsourced sales, marketing and retail merchandising
services throughout the U.S., Canada and Europe. For 90 years, Acosta has led the
industry in helping consumer packaged goods companies move products
off shelves and into shoppers' baskets. For more information,
please visit www.acosta.com.
Forward-Looking Statements
In accordance with the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995, Acosta cautions that
statements in this communication which are forward-looking, and
provide other than historical information, involve risks,
contingencies and uncertainties. Although we believe that the
expectations reflected in those forward-looking statements are
reasonable, we can give no assurance that those expectations will
prove to have been correct. Those statements are made by using
various underlying assumptions and are subject to numerous risks,
contingencies and uncertainties, including, among others:
negotiations with third parties; regulatory and other approvals;
adverse changes in the markets in which Acosta operates or credit
or capital markets; and actions by lenders, other creditors,
clients, customers and other business counterparties of Acosta. If
one or more of these risks materialize, or if underlying
assumptions prove incorrect, actual results may vary materially
from those expected. You should not place undue reliance on
forward-looking statements. This communication reflects the views
of Acosta's management as of the date hereof. Except to the
extent required by applicable law, Acosta undertakes no obligation
to update or revise any forward-looking statement.
Contacts
Frances
Jeter/Danya
Al-Qattan
Sard Verbinnen & Co
832-680-5120/212-687-8080
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SOURCE Acosta, Inc.