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


SSG Advises MSD Performance in Section 363 Sale to Z Capital Partners Affiliates

January 15, 2014, 07:24 AM
Filed Under: Bankruptcy

SSG Capital Advisors acted as the exclusive investment banker to MSD Performance, Inc. ("MSD" or the "Company") in the sale of substantially all of its assets to affiliates of Z Capital Partners, LLC ("Z Capital").  The sale was effectuated through a Chapter 11 Section 363 process and closed in December 2013.

MSD, headquartered in El Paso, TX, serves the motor sports enthusiast and professional racing markets where it has been recognized as a leader in performance ignition systems for over 40 years.  The Company maintains five facilities across the U.S. and one in China and operates through two main business focuses: MSD and Powerteq.  MSD develops and manufactures ignition controls, distributors, drag racing data acquisition units and fuel injection systems under the brands MSD Ignition, Racepak and Atomic.  Powerteq includes Superchips, an industry leader in automotive tuning and Edge Products, a manufacturer of in-line devices for diesel powered vehicles.

The Company began a series of acquisitions in 2005 at a time when the dynamics of the market were rapidly changing. Increased competition, improved performance by vehicle producers and the downturn in the economy led to pressure on the Company's sales and profitability.  In response, MSD restructured the organization and implemented several strategic initiatives to grow and diversify its revenue base, rationalize its cost structure, reduce its working capital needs, improve margins and maintain profitability.  While MSD was able to maintain healthy margins, the Company had a significant debt burden which constrained liquidity and limited its ability to grow.

After considering a number of options for reorganization, MSD determined that a sale of the Company's assets would maximize value for stakeholders.  SSG was retained in June 2013 as the Company's exclusive investment banker to market the business for sale.  In order to sell its assets, the Company filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware in September 2013.  SSG conducted a comprehensive marketing process which resulted in a wide range of interest from potential strategic and financial buyers.  Z Capital's offer of $78 million was ultimately the highest and best price for substantially all of MSD's assets. SSG's ability to solicit competitive offers from strategic and financial buyers in a fast-tracked process and extensive experience with section 363 sales enabled the Company to maximize value while preserving the jobs of substantially all of MSD's employees and maintaining the loyalty of customers and vendors.

Z Capital Partners is a leading private equity firm with approximately $1.2 billion regulatory assets and committed capital under management that makes constructive, control investments in distressed middle-market companies that require turnaround, restructuring, or bankruptcy or are otherwise special situations.

Other professionals who worked on the transaction include:

  • Ron Turcotte and Dennis M. Gerrard of Aurora Management Partners, advisors and senior management of MSD Performance, Inc.;
  • Amy Edgy Ferber, Thomas A. Howley, Aldo L. LaFiandra, David S. Phillips and Paul M. Green of Jones Day, Counsel to MSD Performance, Inc.;
  • Daniel J. DeFranceschi, Paul N. Heath, Zachary I. Shapiro and Amanda R. Steele of Richards, Layton & Finger,P.A., Delaware counsel to MSD Performance, Inc.;
  • John Herzog and Mark Thompson, Special Committee of the Board of Directors of MSD Performance, Inc.;
  • John Owen Gwathmey and Jonathan L. Hauser of Troutman Sanders LLP, counsel to the Special Committee of the Board of Directors of MSD Performance, Inc.;
  • Lee R. Bogdanoff, David A. Fidler and Vijay S. Sekhon of Klee, Tuchin, Bogdanoff & Stern, LLP, counsel to Z Capital Special Situations Fund II, L.P. and Z Capital MSD, L.L.C.;
  • Michael R. Nestor and M. Blake Cleary of Young Conaway Stargatt & Taylor, LLP, Delaware counsel to Z Capital Special Situations Fund II, L.P. and Z Capital MSD, L.L.C.;
  • Douglas Bacon and Alicia C. Davis of Latham & Watkins, LLP, counsel to Z Capital Special Situations Fund II, L.P. as agent for the First Lien Lenders;
  • Francis A. Monaco, Jr. of Womble Carlyle Sandridge & Rice LLP, Delaware counsel to Z Capital Special Situations Fund II, L.P. as agent for the First Lien Lenders;
  • Randall L. Klein, Ronald Barliant and Nicholas S. Alexsovich of Goldberg Kohn Ltd., counsel to the OriginalPar Lenders;
  • Robert J. Dehney, Curtis S. Miller and Andrew Remming of Morris Nichols Arsht & Tunnell LLP, Delaware counselto the Original Par Lenders;
  • Bonnie Glantz Fatell, Regina Stango Kelbon, Michael B. Schaedle and Josef W. Mintz of Blank Rome, LLP, counsel to the Official Committee of Unsecured Creditors; and
  • Christopher K. Wu, Scott Webb and David Endo of Carl Marks Advisory Group, financial advisor to the Official Committee of Unsecured Creditors.

SSG contacts on this deal include:

  • J. Scott Victor, Managing Director
  • Teresa C. Kohl, Director
  • Neil Gupta, Vice President
  • Taylor Will, Analyst

SG Capital Advisors is an independent boutique investment bank that assists middle-market companies and their stakeholders in completing special situation transactions.  We provide our clients with comprehensive advisory services in the areas of mergers and acquisitions, private placements, financial advisory, financial restructurings and valuations.  SSG has a proven track record of closing over 200 transactions in North America and Europe and is one of the leaders in the industry.

Week's News

Comments From Our Members

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