MSD PERFORMANCE INITIATES VOLUNTARY CHAPTER 11 PROCESS TO COMPLETE AN ORDERLY SALE
Lenders' Consent To Company's Use Of Cash Collateral Ensures Operations Continue As Usual With the Highest Quality and Outstanding Service
EL Paso, Texas, September 6, 2013 – MSD Performance, Inc. today announced that to address liquidity needs and facilitate a restructuring, the company and its U.S. subsidiaries have filed voluntary petitions in the United States Bankruptcy Court for the District of Delaware under Chapter 11 of the U.S. Bankruptcy Code. The filing does not include the company's non-U.S. entities.
MSDP has determined that the best way to preserve value for its stakeholders is through an orderly sale of substantially all of its assets. To ensure the most efficient sales process possible and to optimize the potential results for all parties, the Company has decided to execute this sale process under the protection of the U.S. Bankruptcy Code.
Through the Chapter 11 filing, MSDP seeks to preserve continuity, to the greatest extent possible, for its customers, employees and business partners while it continues discussions with potential buyers to secure the highest and best outcome for its businesses.
"As an industry leader in the performance ignition systems market for over 40 years, MSDP brings significant value to customers, suppliers and potential buyers based on our long-standing customer relationships, robust product offering and proven focus on quality performance," said Ron Turcotte, Chairman and CEO. "Selling operations on a going concern basis in an orderly sale through Chapter 11 is the best way to preserve as many jobs as possible, best serve our customers and will allow our operations to emerge from bankruptcy in a relatively short time frame," said Turcotte. "The operations we are selling have strong product portfolios, advanced technologies and continue to perform well operationally."
Under the bankruptcy sale process, the proposed transaction is subject to the execution of a definitive asset purchase agreement, court approval and other customary conditions. Interested parties will have an opportunity to submit higher or better offers for MSDP's assets.
The Company restructured its debt in 2009 following the financial downturn as well as a series of acquisitions by prior management, which burdened it with excessive debt. Since that time, the Company has reduced operating costs, introduced award-winning products and accelerated marketing initiatives. The decision to file under Chapter 11 is necessary to facilitate this transaction, which positions MSDP to take advantage of emerging growth opportunities.
To fund its continuing operations MSDP has received the consent of the lenders under its existing secured credit facility to use the Company's cash collateral. Subject to Court approval, the Company's cash collateral will be used for the company's normal working capital requirements. Employees will continue to be paid as usual, including their healthcare and other benefits and no layoffs or facility closings are anticipated. Customers will receive their orders as usual and the Company anticipates that there will be no changes in warranties or other customer programs Additionally, suppliers will be paid for goods and services after the filing date in accordance with existing terms and contracts.
MSDP's restructuring counsel is Jones Day. Its investment banker is SSG Advisors, LLC. MSDP is also represented by Richards Layton and Finger, as local counsel.
About MSD Performance, Inc.
MSD Performance, Inc., headquartered in El Paso, Texas, operates in the power sports enthusiast and professional racer markets where they maintain leading market share positions across all of their product categories under the MSD Ignition®, Racepak® and Powerteq® brands. You can shop our products online at www.msdignition.com, www.powerteq.com and www.racepak.com, or visit one of our many automotive and performance distributors across the country.
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Manny Grijalva J. Scott Victor
MSD Performance SSG Advisors, LLC
(915) 856-2416 (610) 940-5802