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School Specialty to Restructure; Enters Into Asset Purchase Agreement With Bayside Capital

January 28, 2013, 07:39 AM
Filed Under: Industry News

School Specialty entered into an asset purchase agreement with an affiliate of Bayside Capital, Inc., under which School Specialty proposes to sell its assets as a going concern through a court-supervised sale process. To facilitate the sale transaction, School Specialty and certain of its subsidiaries today filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware and is pursuing the sale process under Section 363 of the Bankruptcy Code.

In connection with the filing, the company has secured a new lending arrangement to be provided by School Specialty's existing asset-based lenders and a commitment for $50 million in additional capital in the form of debtor-in-possession financing from an affiliate of Bayside Capital. This financing is intended to provide School Specialty with ample liquidity to operate the business and meet its ongoing obligations to customers, business partners, suppliers and employees through completion of the sale process.

This announcement will enable a sale of the business on an expedited basis to Bayside Capital or any higher or better bidder approved by the Court, and its emergence as owned by a financially stronger entity. The company anticipates completing the sale process in approximately 60-90 days.

School Specialty's Canadian subsidiaries are included in the proposed sale but are not part of the Chapter 11. The Chapter 11 filings are not expected to have any impact on the Company's operations in Canada, which will continue in the ordinary course without interruption.

Bayside Capital is an affiliate of H.I.G. Capital, a leading global private investment firm with more than $10 billion of equity capital under management.

The company's financial advisor is Perella Weinberg Partners LP, its restructuring advisor is Alvarez & Marsal North America, LLC, and its restructuring counsel is Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young Conaway Stargatt & Taylor, LLP. Bayside's legal advisor is Akin Gump Strauss Hauer & Feld LLP.

View School Specialty's website for more information on the restructuring.

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