BY Fraser Tennant
Over $100m in debt and unable to turn a profit for years, health products company Avadim Health has filed for Chapter 11 bankruptcy in order to sell its assets and position itself for a “long and prosperous future”.
To facilitate the sale and restructuring, Avadim’s existing lender, Hayfin Capital Management, has entered into a binding stalking horse purchase agreement and committed to provide certain debtor-in-possession (DIP) financing, subject to court approval, to allow Avadim to meet its obligations during the process.
Furthermore, the financing that Hayfin has committed to provide in connection with the Chapter 11 filing, along with Avadim’s cash flow from operations, will provide ample liquidity to operate the business and meet ongoing obligations to customers, vendors and employees through the completion of the sale process.
Avadim has also announced it has retained investment bank SSG Capital Advisors, LLC to initiate a comprehensive marketing of its assets to other potential buyers to ensure it receives the highest and best price.
"Our goal is to pursue a transaction that maximises the value of the company and ensures we have the necessary resources and flexibility to invest in, and grow the business," said Keith Daniels, chief restructuring officer at Avadim. "We will continue to create and market world-class products, including our Theraworx line, that our customers have come to love."
"We are confident this action provides us with the most efficient and effective way to pursue a transaction while at the same time allowing us to address financial challenges and best position the company going forward," he continued. "To be clear, the action has no impact on our day-to-day business or our ability to continue serving our customers."
Based in North Carolina, Avadim Health develops and sells topical products to improve immune health, neuromuscular health and skin barrier health – products that target the institutional care and self-care markets.
Mr Daniels concluded: “We are proud of the important and meaningful work Avadim has done over the years and are committed to ensuring the company has the right resources in place to continue its mission. We are excited about our future."
News: Avadim Health Files Chapter 11 to Put Lenders in Control