Salus, Sterling Provide DIP to Support Kid Brands Sale
Kid Brands announced it plans to pursue a sale of substantially all of the assets of the company, or one or more of its subsidiaries, facilitated through the filing of voluntary chapter 11 petitions in the United States Bankruptcy Court for the District of New Jersey.
Kid Brands said it intends to operate its current business in the ordinary course during the chapter 11 process and has secured commitments for $49 million in debtor-in-possession financing from Salus Capital Partners and Sterling National Bank, the company’s existing lenders, which, in addition to Kid Brands’ ongoing cash flow, will enable the company to fund its financial obligations after the voluntary petitions are filed, subject to Bankruptcy Court approval.
As previously announced, Kid Brands had initiated a review of strategic and financing alternatives, including addressing under-performing product lines, exploring strategic alliances, the sale or merger of the company or one or more of its subsidiaries, restructuring the company’s current debt, a recapitalization, or other possible transactions. The board of directors ultimately determined that pursuing a sale under section 363 of the bankruptcy code through a chapter 11 filing is in the best interests of the company and its stakeholders.