Secures Approximately $10.5 Million in Debtor-in-Possession
Financing
DALLAS, May 10, 2024
/PRNewswire/ -- KidKraft, Inc. and its U.S. and Canadian affiliates
(collectively, "KidKraft" or the "Company"), an industry leader in
the design and development of branded, wood-based active and
imaginative play products including swing sets, doll houses, role
play, playhouses, and more, announced today that it has filed
voluntary petitions for Chapter 11 relief in the United States Bankruptcy Court for the
Northern District of Texas (the
"Court") to effectuate a value-maximizing sale transaction to
Backyard Products, LLC ("Backyard") that will allow for the
continued operation of the business, with the resources to invest
in growth across key markets globally.
The Company enters this process with the strong support of its
first lien secured lender, its majority shareholder, and Backyard,
all of whom executed a restructuring support agreement (the "RSA")
prior to the filing. The RSA sets forth the principal terms of the
restructuring transaction to be effectuated by the prepackaged
chapter 11 plan, including the sale of substantially all of the
U.S. and Canadian assets to Backyard pursuant to an asset purchase
agreement (the "APA"). The APA sets forth the terms of the sale,
which will enable the continued operation of the business as a
going concern under new ownership. The Company is targeting closing
the sale in approximately two months, subject to approval by the
Court and other conditions in the APA, the chapter 11 plan, and
related transaction documents.
"Today's announcement marks an important step forward for
KidKraft that will position us to continue investing in our
industry-leading products and delivering for our valued customers
well into the future," said Geoffrey
Walker, President and Chief Executive Officer, KidKraft,
Inc. "We are confident that with the strong support of new
ownership, KidKraft will be on track to continue inspiring
imaginative play experiences through our impressive range of high
quality products."
As a continuation of its support through the sale process and
successful restructuring, the Company has also received a
commitment from 1903 Partners, LLC, an affiliate of Gordon Brothers, to provide up to $10.5 million of new money debtor-in-possession
("DIP") financing, subject to Court approval. This financing,
combined with cash flow from operations, is expected to enable the
Company to continue operations in the ordinary course during the
Chapter 11 process and to provide sufficient liquidity to ensure
continuity of manufacturing and distribution.
KidKraft has also filed customary motions in the Chapter 11
cases, seeking court approval to continue supporting its operations
during this process. These motions, upon approval, will ensure the
continued payment of employee wages and benefits, maintenance of
customer programs, and other relief measures customary in these
circumstances.
The Company's entities incorporated or organized in Canada will also file CCAA recognition
proceedings under supervision of the Canadian Bankruptcy Court. Its
international operations in Europe, the Pacific, and Asia are not a part of this reorganization
process.
Additional information is available through the Company's claims
agent, Stretto, Inc., at www.stretto.com/kidkraft. Stakeholders
with questions can call 855-469-1713 (Toll Free)
or 714-886-6210 (International).
Company Advisors
Vinson & Elkins, LLP, is serving as counsel, Sierra
Constellation Partners, LLC is serving as financial advisor, and
Baird is serving as investment
banker to the Company.
About KidKraft®
KidKraft is a global leader in award-winning products that are
MADE FOR MAKE BELIEVE™. The company is committed to inspiring
imaginative play creatively for children everywhere through
dollhouses, kitchens, outdoor, vehicles, furniture, and toys.
KidKraft's high-quality products, designed for traditional play,
are available at more than 2,800 retailers in more than 90
countries worldwide. KidKraft's global headquarters are located in
Dallas, Texas. For more
information, visit www.kidkraft.com and
follow @kidkrafttoys on Instagram.
Media Contact:
Geoff Walker
KidKraft, Inc.
press@kidkraft.com
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SOURCE KidKraft, Inc.