industry
Retail & Consumer Products

Advising on restructuring in the acquisition of a major health club company

Key metrics:
  • Restructured the company from $100M+ of debt to successful sale​​​
Value levers pulled:
  • Lender advisory
  • Financial and strategic analysis and options
  • Liquidity management
  • Buyside advisory (lenders)
  • New entity stand-up

Picture this...

You’re a $140M, 100-club chain of gyms facing declining revenues, more than $100M of debt, and potential forbearance on your financial obligations. The pandemic heavily impacted your ability to sustain revenue growth, as well as meet loan and covenant terms, and it’s become apparent that a restructuring is likely required. You’re looking for financial and strategic options in order to move forward.​

You turn to Accordion.

Your senior secured lender comes to us, so we develop various scenario analyses to evaluate the financial and operational impact of both forbearance and bankruptcy options, ultimately deciding that Chapter 11 restructuring would be the most beneficial path. We jump in as a partner to assist in the Chapter 11 process, strengthen financial performance, and manage liquidity. We do this by:

  • Preparing and presenting periodic updates and recommendations on key findings and observations to the lender group.
  • Collaborating with advisors to determine and negotiate the sizing of DIP Funding.
  • Working with counsel to advise lenders on the structure of the Stalking Horse Credit Bid, including preparation of an Adequate Assurance package for submittal to court.
  • Monitoring post-petition performance of business and compliance with DIP covenants and advising the lenders on the progress of §363 sale and related issues, serving as liaison with the company’s investment banker.
  • Leading post-auction transition activities and stand-up of Newco entities for the lender/new owners.
  • Identifying and executing on transaction-related tasks, and collaborating with the new CEO, Chairman, and counsel to successfully close for the lender group on purchase of assets.

Your value is enhanced.

With Accordion’s help, the secured lenders and your company implement a restructuring strategy that results in the closing of some underperforming units, strengthening your financial performance. This leads to a successful sale of the company to the secured lenders in a debt-for-equity transaction. 

Enhanced value:

You reap multiple benefits, including:

  • Restructured the company from $100M+ of debt to successful sale​​​