School Specialty Initiates Financial Restructuring and Enters Into Agreement
With Private Investment Firm
Receives Commitment for $50 Million in Additional Financing
Sale and Restructuring to Be Implemented Through Chapter 11 Process; Sale
Subject to Court-Supervised Auction for Higher or Better Offers
School Specialty Operations Continue Without Interruption
GREENVILLE, Wis., Jan. 28, 2013 (GLOBE NEWSWIRE) -- School Specialty, Inc.
(Nasdaq:SCHS) ("the Company") today announced that it has entered into an
asset purchase agreement with an affiliate of Bayside Capital, Inc., under
which School Specialty proposes to sell its assets as a going concern through
a court-supervised sale process. To facilitate the sale transaction, School
Specialty and certain of its subsidiaries today filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District
of Delaware and is pursuing the sale process under Section 363 of the
In connection with the filing, the Company has secured a new lending
arrangement to be provided by School Specialty's existing asset-based lenders
and a commitment for $50 million in additional capital in the form of
debtor-in-possession financing from an affiliate of Bayside Capital. This
financing is intended to provide School Specialty with ample liquidity to
operate the business and meet its ongoing obligations to customers, business
partners, suppliers and employees through completion of the sale process.
Today's announcement will enable a sale of the business on an expedited basis
to Bayside Capital or any higher or better bidder approved by the Court, and
its emergence as owned by a financially stronger entity. The Company
anticipates completing the sale process in approximately 60-90 days.
School Specialty's President and CEO Michael P. Lavelle, said, "We are pleased
to have reached these agreements with Bayside, and are confident School
Specialty's business has a bright future. We fully expect to continue normal
business operations, providing quality, value-driven education products and
excellent customer care and programs. Our customers remain a top priority and
we plan to meet all our customer commitments and maintain customer policies
"We have made good progress in our turnaround strategy to strengthen School
Specialty's business by realigning the organization to deliver better value
for our customers and improving the quality and efficiency of operations.In
School Specialty, we have a company with excellent potential but with a
burdensome amount of debt on our balance sheet. The actions we are announcing
today allow us to strengthen our financial condition as we continue
transforming School Specialty's business for the future, including building
our brands and product offerings and positioning our business for long-term
success as the funding environment improves," Lavelle concluded.
School Specialty's Canadian subsidiaries are included in the proposed sale but
are not part of the Chapter 11. The Chapter 11 filings are not expected to
have any impact on the Company's operations in Canada, which will continue in
the ordinary course without interruption.
It is uncertain whether School Specialty shareholders will receive any
distribution from proceeds of a sale and whether these securities will have
any value following the Chapter 11 case.
Bayside Capital is an affiliate of H.I.G. Capital, a leading global private
investment firm with more than $10 billion of equity capital under management.
The Company's financial advisor is Perella Weinberg Partners LP, its
restructuring advisor is Alvarez & Marsal North America, LLC, and its
restructuring counsel is Paul, Weiss, Rifkind, Wharton & Garrison LLP and
Young Conaway Stargatt & Taylor, LLP.Bayside's legal advisor is Akin Gump
Strauss Hauer & Feld LLP.
Additional information about the restructuring is available on the Company's
website at www.schoolspeciality.com. Claims information is available at
www.kccllc.net/schoolspecialty or by calling the School Specialty's new
Restructuring Information Center toll-free at (+1-877) 709-4758.
AboutSchool Specialty, Inc.
School Specialtyis a leading education company that provides innovative and
proprietary products, programs and services to help educators engage and
inspire students of all ages and abilities to learn.The company designs,
develops, and provides preK-12 educators with the latest and very best
curriculum, supplemental learning resources, and school supplies.Working in
collaboration with educators,School Specialtyreaches beyond the scope of
textbooks to help teachers, guidance counselors and school administrators
ensure that every student reaches his or her full potential. For more
information aboutSchool Specialty, visitwww.schoolspecialty.com.
Cautionary Statement Concerning Forward-Looking Information
Any statements made in this press release about futurefinancial condition,
results of operations, expectations, plans, or prospects, constitute
forward-looking statements. Forward-looking statements also include those
preceded or followed by the words "anticipates," "believes," "could,"
"estimates," "expects," "intends," "may," "should," "plans," "targets" and/or
similar expressions. These forward-looking statements are based on School
Specialty's current estimates and assumptions and, as such, involve
uncertainty and risk. Forward-looking statements are not guarantees of future
performance, and actual results may differ materially from those contemplated
by the forward-looking statements because of a number of factors, including
the factors described in Item 1A of School Specialty's Annual Report on Form
10-K for the fiscal year ended April 28, 2012, which factors are incorporated
herein by reference. Except to the extent required under the federal
securities laws, School Specialty does not intend to update or revise the
CONTACT: Investor Contact:
School Specialty, Inc.
Elizabeth Higashi, CFA
Kekst and Company
Kimberly Kriger/Nathan Riggs
School Specialty, Inc.
Press spacebar to pause and continue. Press esc to stop.