FREE MEMBERSHIP Includes » ABL Advisor eNews + iData Blasts | JOIN NOW ABLAdvisor Gray ABLAdvisor Blue
Skip Navigation LinksHome / News / Read News


BowFlex Files Chapter 11, Secures $25MM DIP Financing Commitment from SLR Credit Solutions

March 05, 2024, 08:02 AM
Filed Under: Bankruptcy

BowFlex Inc. has entered into a purchase agreement with Johnson Health Tech Retail, Inc. (the “Stalking Horse Bidder”) to serve as the stalking horse bidder to acquire substantially all of the assets of the Company for $37,500,000 in cash at the closing of the transaction, less closing adjustment amounts for accounts receivable, inventory and certain transfer taxes. In order to facilitate the sale process, the Company and certain of its subsidiaries have voluntarily initiated a Chapter 11 proceeding (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the District of New Jersey (“Bankruptcy Court”), which will provide interested parties the opportunity to submit competing offers.

Additionally, subject to court approval, the Company has secured a $25 million facility for debtor-in-possession financing, comprised of a $9 million revolving commitment and $16 million term loan reflecting the roll-up of the Company’s pre-petition term loans of approximately $16 million (the “DIP Facility”) from Crystal Financial LLC d/b/a SLR Credit Solutions (“SLR”) and its affiliates, subject to court approval, to enable the Company to continue operating in a normal course and meet its financial obligations to employees, vendors and its continued provision of customer orders during Chapter 11 proceedings and while executing the sale process. The DIP Facility is being provided by SLR pursuant to an amendment (the “Amendment”) to the Company’s existing Term Loan Credit Agreement with SLR dated November 30, 2022 (as amended, the “Credit Agreement”).

“For decades, BowFlex has empowered healthier living and enabled consumers to reach their fitness goals with our innovative home fitness products and individualized connected fitness experiences. As a result of the post-pandemic environment and persistent macroeconomic headwinds, we conducted a comprehensive strategic review and determined this was the best path forward for our Company,” said Jim Barr, BowFlex Inc. Chief Executive Officer. “We are fortified by the potential partnership with Johnson Health Tech and encouraged by the multiple parties that have indicated an interest in bidding for our Company. Our goal is to maximize value for our stakeholders through this process.”

The Company is seeking approval of the proposed transaction pursuant to Section 363 of Chapter 11 of the U.S. Bankruptcy Code, which will allow outside interested parties to submit higher or otherwise better offers. The transaction is subject to approval by the Bankruptcy Court and any other approvals that may be required by law, and other customary conditions.

The Asset Purchase Agreement with the Stalking Horse Bidder (the “Stalking Horse Asset Purchase Agreement”) provides for standard bid protections. These protections include: (i) the reimbursement by the Company of up to $600,000 of the Stalking Horse Bidder’s expenses payable under specified circumstances upon a termination of the Stalking Horse Asset Purchase Agreement; (ii) payment by the Company of a breakup fee of 3.5% of the Purchase Price; and (iii) the Company’s forfeiture of the $3.75 million Stalking Horse Bidder’s deposit.

Sidley Austin LLP and Holland & Hart LLP are serving as legal advisors to BowFlex. FTI Consulting, Inc. and FTI Capital Advisors LLC have been retained as financial advisor and investment banker to BowFlex to manage the sale and auction process.

Week's News

Comments From Our Members

You must be an ABL Advisor member to post comments. Login or Join Now.