Vyaire Medical files for Chapter 11

September 2024 | DEALFRONT | BANKRUPTCY & CORPORATE RESTRUCTURING

Financier Worldwide Magazine

September 2024 Issue

Following a significant drop in demand in the wake of the coronavirus (COVID-19) pandemic, global ventilator and respiratory device manufacturer Vyaire Medical, along with certain of its subsidiaries, has filed for Chapter 11.

The company’s decision to file for bankruptcy protection follows below-plan performance in the first half of the financial year, which frustrated its efforts to refinance the company’s debt. According to the filing, Vyaire’s total assets were between $100m and $500m with total liabilities between $500m and $1bn.

Chicago-based Vyaire’s filing is part of a trend emerging in the industry, which sees the crash of many companies that exploded during the early days of the pandemic. In May 2024, Cue Health, a developer of COVID-19 detection tests, ceased operations. Founded in 2010, the California-based company saw amazing growth in 2021 and at one point had a valuation approaching $3bn.

Vyaire’s filing, which only applies to its operations in the US and one non-operational international holding company, has been made in order for the company to obtain sufficient financing to continue business operations while it markets its business units for a value-maximising sale.

“Chapter 11 protection will offer us the breathing room we need to explore selling our businesses to capable, well-financed buyers,” said John Bibb, group chief executive at Vyaire. “These buyers have the financial ability and stability to execute on respiratory diagnostics (RDx) and ventilation business strategies delivering our vital products to customers and patients in need.”

To that end, Vyaire remains open for business and, upon court approval, will have post-petition financing in hand to continue operations while in Chapter 11.

“Our lenders continue to support our business, and we are working together to go through this process with as little disruption as possible to our customers and trusted partners,” continued Mr Bibb. “Our plan is to maintain the team needed to operate safely and deliver effective healthcare solutions.”

In the coming months, Vyaire intends to focus on supporting the continuity of services to customers and honouring commitments to partners and employees, while complying with the terms of the US Bankruptcy Code. It also intends to sell its business units to stable, well-capitalised buyers that will support the growth and development of the company’s RDx and ventilation portfolios.

Originally spun out as a joint venture between Becton Dickinson and Apax Partners in 2016, the integrated solutions offered by Vyaire’s RDx businesses help enable, enhance and extend lives. Its products are available in more than 100 countries and are recognised, trusted and preferred by specialists throughout the respiratory community worldwide.

Vyaire’s diagnostics portfolio covers a variety of devices for gauging lung function, including spirometry and plethysmography systems, as well as ECG pads and six-minute walk test trackers.

Its hospital ventilator catalogue covers neonates, paediatrics and adult patients.

Vyaire previously sold off its respiratory and anaesthesia consumables business to SunMed in May 2023 – a deal that Vyaire disclosed totalled about $310m, netting the company about $134m in cash after paying down its outstanding credit facility.

Mr Bibb concluded: “We remain committed to the success of our customers, partners and employees, and will continue to live out our core values in the work we do.”

Fraser Tennant