Daily News: February 24, 2014

SSG Advises Color Star Growers in Asset Sale

SSG Capital Advisors announced it acted as the investment banker to Color Star Growers of Colorado in the sale of substantially all of its assets to Altman Plants, Raindrop Partners and Black Diamond Capital Management, which owns Color Spot Nurseries. The sale was effectuated through a Chapter 11 §363 process and closed in January 2014.

The flower and nursery stock wholesaling industry had been negatively impacted by stagnant consumer spending, slow housing starts, retailer consolidation and a lack of growth. These factors, coupled with adverse weather conditions during the company’s peak growing season in 2013, had a material negative impact on its financial performance. As a result, the company faced liquidity constraints and filed for Chapter 11 Bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Texas in December 2013.

SSG was retained in September 2013 as Color Star’s investment banker to explore strategic alternatives, including a sale of substantially all of the company’s assets. SSG conducted a comprehensive marketing process which resulted in a wide range of potential buyers, including multiple strategic and financial parties, interested in operating Color Star as a going concern business. The process resulted in eight qualified bids for the assets in entirety and in parts.

The robust auction lasted two days and culminated in the bankruptcy court soliciting last and final bids during the sale hearing. In order to maximize value, SSG and the debtor’s professionals selected three buyers to form a combined bid for all of Color Star’s assets. Altman Plants purchased the company’s Giddings, TX, Harrisonville, MO, and Peyton, CO, assets; plus equipment and inventory at the Austin, TX, Carthage, MO, and Jasper, MO, facilities. Raindrop Partners purchased all of the company’s Old Fort Lupton, CO, and New Fort Lupton, CO, assets, and Black Diamond Capital Management purchased all of the cmpany’s Sanger, TX, assets.

SSG’s knowledge of the industry, extensive dialogue and negotiations with parties interested in different parts of the company’s assets and experience in running efficient and timely Chapter 11 sales processes enabled the company to maximize the value of the assets.

Altman Plants is one of the nation’s largest grower for the horticulture industry with 1,100 employees and 6 million square feet of greenhouse operations over 1,200 acres in three states.

Raindrop Partners acquires, invests in and advises small businesses in Colorado.

Color Star is a grower and wholesaler of flowers and nursery stock with greenhouses and distribution centers in nine locations spanning Colorado, Missouri and Texas.