Dynata files for prepackaged Chapter 11

August 2024 | DEALFRONT | BANKRUPTCY & RESTRUCTURING

Financier Worldwide Magazine

August 2024 Issue

In an attempt to deal with a heavy debt load and strained cash flow, market research firm Dynata has filed for prepackaged Chapter 11 bankruptcy protection, listing assets and liabilities of at least $1bn each.

Dynata’s bankruptcy filing includes a restructuring support agreement (RSA) under which substantially all of its lenders agreed to support its Chapter 11 plan. The lenders have also agreed to extend $81.5m in new money financing – $31.5m in debtor in possession financing and $50m in exit financing.

The RSA includes a voluntary write down of almost 40 percent of Dynata’s total debt, reducing the amount from $1.3bn to $780m in exchange for the first and second lien holders to own 100 percent of the equity in the company.

Dynata has also filed customary first day motions with the bankruptcy court to ensure operations continue without interruption, including making payments to all employees and vendors. The company has stated that phase two of its 36-month transformation plan to support its long-term growth strategy remains on track.

“We are happy to report that Dynata is operating business as usual,” said Mike Petrullo, chief executive of Dynata. “We are paying our vendors, partners and employees in full and on time and continue to provide high-quality service to our customers. This prepackaged filing has been crucial to securing Dynata’s future, as our transformation plan continues unabated, and we are well positioned for growth.”

The world’s largest first-party data company for insights, activation and measurement, Dynata has a reach that encompasses nearly 70 million consumers and business professionals globally. It serves more than 6000 market research, media and advertising agencies, publishers, consulting and investment firms and corporate customers in North America, South America, Europe and Asia Pacific.

The result of a 2018 merger between Research Now and SSI, Dynata has built innovative data services and solutions around its robust first-party data offering to bring the voice of the customer to the entire marketing continuum – from uncovering insights to activating campaigns and measuring cross-channel marketing return on investment.

Serving as Dynata’s legal adviser is Willkie Farr & Gallagher LLP, with Alvarez & Marsal North America, LLC serving as restructuring adviser and Houlihan Lokey, Inc. serving as investment banker.

Gibson, Dunn & Crutcher LLP is serving as lead counsel and PJT Partners LP is serving as investment banker to an ad hoc group of controlling first lien lenders. Vinson & Elkins LLP is serving as lead counsel and Lazard is serving as investment banker to an ad hoc group of controlling second lien lenders.

The Chapter 11 process is limited to Dynata’s US entities, with all foreign businesses remaining unaffected. The company has stated that it expects to emerge from Chapter 11 in early July 2024.

Mr Petrullo concluded: “I am excited to start the second half of the year with a significantly deleveraged balance sheet, fresh capital and increased momentum, with no business disruption in the meantime.”

Fraser Tennant