Auto parts provider ATD files for Chapter 11

BY Fraser Tennant

In what is the latest auto parts provider to head to bankruptcy court, American Tire Distributors (ATD) has filed for Chapter 11 bankruptcy in order to implement a restructuring support agreement (RSA).

The Chapter 11 filing is the second time ATD has sought bankruptcy protection in six years – one of a number of auto parts retailers and distributors that have been battling financial distress in 2024 as they face headwinds from several industry challenges.

The RSA contemplates transitioning ownership of the company through a competitive sale process with certain lenders, including credit funds and accounts managed by Guggenheim Partners Investment Management, LLC, KKR, Monarch Alternative Capital LP, Sculptor Capital Management, Inc. and Silver Point Capital, L.P.

The contemplated transaction would eliminate a significant amount of debt and provide access to new capital, positioning the business as a stronger partner to manufacturers and customers who rely on ATD to improve their productivity, profitability and performance.

“For nearly 90 years, ATD has continuously evolved to meet the dynamic shifts and challenges facing the auto aftermarket,” said Michael Feder, interim chief executive of ATD. “We are now taking further steps to position ATD for our next phase as a stronger distribution partner to our manufacturers and customers as we return to our roots and hone our core value proposition as a wholesale distributor.

“Since being named interim chief executive, I have seen how impactful our business is to the manufacturer partners, customers, associates and communities we support, and this process will serve to reinforce those relationships,” he continued. “Our operations remain steady and, by moving forward with new owners on stronger financial footing.”

To ensure continued business operations, ATD has secured commitments for $250m in new financing from the aforementioned lender group, as well as access to $1.2bn in debtor in possession (DIP) financing from lenders under the company’s prepetition asset-based lending (ABL) facility , in the form of post-petition financing credit facilities. 

Upon court approval, the DIP financing, coupled with cash generated from the company’s ongoing operations, is expected to provide sufficient liquidity to support the business during the Chapter 11 and RSA processes.

Mr Feder said the company was confident that entering into these processes with the support of the lender group would enable ATD to execute its business strategy and achieve our long-term objectives.

News: American Tire Distributors lines up sale to lenders in bankruptcy

Sanofi to sell Opella to CD&R in €16bn deal

BY Fraser Tennant

In a transaction with an enterprise value of €16bn, French drugmaker Sanofi is to sell a 50 percent controlling stake in its consumer health business Opella to US private equity firm Clayton Dubilier & Rice (CD&R).

CD&R’s acquisition of Opella paves the way for the creation of a new, standalone leader in consumer healthcare, while supporting Sanofi’s strategy and increased focus on innovative medicines and vaccines.

French public investment bank Bpifrance is expected to become a minority shareholder, taking a stake of around 2 percent and a seat on the board of Opella.

“This is an exciting opportunity for CD&R to partner with Sanofi, one of the world’s leading healthcare companies,” said Eric Rouzier, partner and head of European Healthcare at CD&R. “Opella is differentiated by the quality of its brand portfolio and its highly skilled and motivated workforce.”

Headquartered in France, Opella employs over 11,000 people and operates in 100 countries with 13 manufacturing sites and four science and innovation development centres. With a portfolio of iconic brands, such as Allegra, Doliprane and Dulcolax, Opella is the third-largest business worldwide in the over-the-counter and vitamins, minerals and supplements market, serving more than half a billion consumers worldwide.

“This acquisition is a major and exciting milestone in Opella's journey,” said Julie Van Ongevalle, president and chief executive of Opella. “Partnering with CD&R will allow Opella to unlock its full development potential, to further drive value creation and deploy the exceptional talent of our teams to become a leading company in the fast-moving consumer healthcare space.”

The transaction, which is expected to close in Q2 2025 at the earliest, is subject to finalisation of definitive agreements, completion of the appropriate social processes and customary statutory approvals.

“We are proud of what Opella and its inspired people have already accomplished and are confident that the future will be even brighter,” concluded Mr Hudson. “We share the love and emotional attachment to Opella’s brands, hence our decision to remain vested in its future.”

News: Sanofi reaches deal on terms of sale of consumer health arm, say French government sources

EQT and others acquire Nord Anglia Education in $14.5bn deal

BY Richard Summerfield

Swedish private equity firm EQT, Neuberger Berman Private Markets and the Canada Pension Plan (CPP) Investment Board have agreed to acquire international schools operator Nord Anglia Education in a deal worth $14.5bn including debt.

The deal will see the EQT-led consortium acquire a majority stake in Nord Anglia, which operates over 80 schools in 33 countries and educates more than 85,000 students worldwide.

Existing owners EQT and CPP Investments will remain shareholders in the company through a new fund investment and reinvestment, respectively, the firms noted in a statement announcing the deal. Nord Anglia’s relationship with EQT began with the firm’s initial investment in 2008. In 2017, EQT strengthened its commitment by increasing its stake in the company and welcoming CPP Investments as a partner. EQT is investing in Nord Anglia through its BPEA Private Equity Fund VIII.

“Nord Anglia’s extensive track record and unwavering commitment to supporting over 85,000 students worldwide uniquely positions the company for future growth,” said David Stonberg, managing director at Neuberger Berman. “We are honored to lead a consortium of investors who share our passion for delivering exceptional educational experiences.”

“We are excited to partner with the EQT team, whose deep industry expertise and proven collaboration with Nord Anglia’s management enhance this investment,” added Jonathan Shofet, managing director at Neuberger Berman. “Together with CPP Investments, we aim to support Nord Anglia’s mission of delivering world-class education.”

“EQT has had the privilege of partnering with Nord Anglia since 2008, and we’ve developed a deep connection with this exceptional business,” said Jack Hennessy, a partner within the advisory team at EQT. “Over the years, we’ve witnessed Nord Anglia grow from six schools to more than 80 which today serve more than 85,000 students across the globe. Alongside this growth, we’re proud to have helped elevate teaching excellence through industry-leading partnerships established under our ownership. With today’s announcement, we are thrilled to continue this journey with Neuberger Berman, CPP Investments, and our global institutional co-investors, and support Nord Anglia’s continued success and innovation in the global education space.”

“Nord Anglia was CPP Investments’ first direct equity investment in the private education sector, and we are proud to have been a partner, alongside EQT, in its growth globally over the years,” said Caitlin Gubbels, senior managing director & global head of private equity at CPP Investments. “Our reinvestment allows us to remain committed to Nord Anglia while delivering an attractive return to the CPP Fund. We are highly confident in the growth potential of the sector and look forward to working with new investors.”

“Families choose our schools because we help our students gain the academic outcomes, confidence, and life skills they need to succeed in the future,” said Andrew Fitzmaurice, chief executive of Nord Anglia Education. “At the heart of our students’ achievements are our high-quality teachers. Our ability to attract and develop outstanding teachers sees us receive over 60 applications for every teaching vacancy, reflecting the strength of our world-class professional learning program and career pathways.”

He continued: “Since day one, EQT and CPP Investments have shared our educational philosophy and with the addition of Neuberger Berman, we are further strengthening this successful partnership. Focused on improving students’ outcomes, we will accelerate our research of new teaching and learning practices, curricula innovation, and the growth and development of our global teaching community.”

News: Sweden’s EQT, others to take control of Nord Anglia for $14.5 billion

Longboard Pharma sold in $2.6bn deal

BY Richard Summerfield

Neuroscience specialist Lundbeck has agreed to buy Longboard Pharmaceuticals in a $2.6bn deal.

The transactions, which has been unanimously approved by the boards of both companies, is expected to close in the fourth quarter of 2024, subject to the tender of at least a majority of the total number of Longboard outstanding voting shares, receipt of required regulatory clearances, and other customary conditions.

The transaction values Longboard stock at $60 a share, representing $2.6bn in equity value and $2.5bn net of cash.

Longboard is a clinical-stage biopharmaceutical company focused on developing novel, transformative medicines for neurological diseases. The company is currently working on treatments for forms for epilepsy, including Dravet and Lennox-Gastaut syndromes. Its leading drug, bexicaserin, has shown promising anti-seizure effects in preclinical and clinical studies. Lundbeck estimates bexicaserin could bring in a peak of $1.5bn to $2bn in sales, assuming a launch in the fourth quarter of 2028.

“This transformative transaction will become a cornerstone in Lundbeck’s neuro-rare franchise, with a potential to drive growth into the next decade,” said Charl van Zyl, president and chief executive of Lundbeck. “Bexicaserin addresses a critical unmet need for patients suffering from rare and severe epilepsies, for which there are very few good treatment options available. With this acquisition, we continue to execute on our Focused Innovator strategy, transforming the lives of patients suffering from severe brain disorders.”

“Longboard was founded to transform the lives of people living with devastating neurological conditions,” said Kevin R. Lind, president and chief executive of Longboard. “I am incredibly proud of what our team has achieved; delivering groundbreaking data with a differentiated and inclusive clinical approach to address the needs of a wide range of DEEs and obtaining Breakthrough Therapy designation.

“Lundbeck’s remarkable capabilities will accelerate our vision to provide increased equity and access for underserved DEE patients with significant unmet medical needs,” he added.

According to Mr van Zyl, the acquisition is part of Longboard’s broader focused innovator strategy. The strategy has already seen the company passing over the US rights for depression drug Trintellix to its partner Takeda in the summer in order to “create financial flexibility and reallocate resources to other growth opportunities”.

News: Denmark’s Lundbeck bets on epilepsy drug with $2.6 bln Longboard deal

Truck parts maker Accuride files for Chapter 11

BY Fraser Tennant

A victim of the freight industry recession in the US, commercial-truck parts manufacturer Accuride, along with a number of its US entities, has filed for Chapter 11 bankruptcy in order to facilitate the restructuring of its North American business.

The company’s liabilities are estimated to be between $500m and $1bn, according to the filing.

Accuride is the latest company in the US transport sector to file for bankruptcy this year amid overcapacity in the freight industry that is hurting both truckers and parts suppliers.

The company’s proposed restructuring, the result of extended negotiations with its lenders, will facilitate economic improvements for operations and significantly reduce funded debt from its balance sheet.

Accuride’s Mexican, European and Asian subsidiaries are not included in the Chapter 11 filing.

To ensure that it continues conducting its business in the ordinary course without interruption, Accuride’s lenders have agreed to provide $30m in debtor-in-possession (DIP) financing, which is structured to provide sufficient liquidity to continue normal operations and meet post-petition obligations to employees, suppliers and customers as they come due.

The DIP financing is intended to provide peace of mind to Accuride’s customers and suppliers and allow the company to maintain or restore normal trade terms with suppliers.

“Accuride’s reorganisation efforts are designed to create a healthier capital structure that will allow the company to remain a leader in the global wheel market,” said Robin Kendrick, president and chief executive of Accuride. “We anticipate a quick emergence from Chapter 11, with a de-levered balance sheet and improved capital structure.”

A leading supplier of wheel-end systems to the global commercial vehicle industry, Accuride’s products include steel and aluminium commercial vehicle wheels and wheel-end components and assemblies, as well as steel wheels for the European automotive and global agricultural, construction and industrial equipment markets.

Accuride is hopeful that it will be able to emerge from bankruptcy on an expedited basis, anticipated to be 90-100 days from the Chapter 11 filing.

Mr Kendrick concluded: “I am confident this reorganisation will give Accuride the financial flexibility it needs to grow its business and support its employees, customers and suppliers.”

News: Wheel supplier Accuride files Chapter 11 papers for U.S. operations