Broder Bros., Co. said it has completed its previously announced financial restructuring through the settlement of its private exchange offer. The imprintable sportswear distributor had warned that a bankruptcy filing would be likely it it failed to complete the exchange offer.
The company retired an aggregate of $213.5 million in principal amount of its 11.25% senior notes due 2010 (“Existing Notes”) in exchange for $94.9 million in aggregate principal amount of the company's newly issued 12%/15% senior payment-in-kind toggle notes due 2013 and shares of the company's common stock, which shares in the aggregate represent 96% of its common stock outstanding as of the issuance date. An aggregate of $11.5 million of the Existing Notes will remain outstanding. As a result of the completion of the restructuring, the company believes that all prior defaults under its existing revolving credit agreement and the Existing Notes have been cured or waived.
“With both the amendments to our existing credit facilities and the exchange offer completed, the company is already receiving major shipments from our vendors again,” commented Tom Myers, the company's CEO. “While we lost orders during this process, we do not believe that we lost customers. We now return to our primary focus of supplying the comprehensive assortment of imprintable activewear that our customers need.”
As part of the restructuring, the existing stockholders of the company were issued warrants to purchase shares of the company's common stock representing an aggregate of 12% of the company's fully diluted common stock as of the issuance date. Pursuant to the terms of restructuring, the company expects that its board of directors will be reconstituted to include three members selected by the ad hoc committee that represented the Existing Notes. Effective today, the three representatives of the company's previous controlling stockholder have resigned from the board of directors.
The company anticipates that it will deliver its audited financial statements for its fiscal year ended December 27, 2008 to its lenders under its revolving credit agreement prior to its extended deadline of May 26, 2009. In addition, the company intends to cease filing reports with the Securities and Exchange Commission as soon as possible.
Miller Buckfire & Co., LLC served as the company's financial advisor and Kirkland & Ellis LLP served as the Company's legal counsel. Broadpoint Securities Group, Inc. served as financial advisor to the ad hoc committee and Quinn Emanuel Urquhart Oliver & Hedges, LLP served as legal counsel to the ad hoc committee.
Via its three divisions, the company distributes industry-leading brands Anvil, Fruit of the Loom,
Gildan, Hanes and Jerzees as well as exclusive retail brands Adidas
Golf and Champion. It currently has eight distribution centers
across the U.S. and has the capability to deliver to approximately 80% of the U.S. population in one day.
