Anagram International, a foil balloon manufacturer, is pursuing a sale of the company and has entered into an agreement with a group of its lenders as the stalking horse bidders to acquire its assets, subject to higher or otherwise better offers and court approval. As part of this agreement, the stalking horse bidders have committed to hire all Anagram employees and assume all pre- and post-petition trade payables. To facilitate an orderly sale process, Anagram has filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, and the sale will be conducted through a court-supervised process under Section 363 of the U.S. Bankruptcy Code, providing potential buyers the opportunity to submit offers.
The company has also received a commitment of $22 million in debtor-in-possession financing (DIP) from a group of its existing secured lenders. Following court approval, this new financing, combined with cash on hand and positive cash flow being generated from the company’s ongoing operations, will adequately support the business and satisfy obligations during the court-supervised process.
In April 2023, Anagram appointed Adrian Frankum, senior managing director at Ankura Consulting, chief restructuring officer. Frankum has more than 24 years of experience in restructuring advisory. Anagram’s management team, including Frankum, will continue to lead the process and manage the business.
“Having carefully reviewed all available strategic options, we believe that a sale of the business will provide Anagram with the best path forward to accelerate global growth and strengthen our market leadership,” Frankum said. “As we move through this process, we remain focused on delivering innovative products to our customers worldwide with minimal disruption, and we are grateful for their trust in us. We thank all our Anagram employees for their ongoing hard work and excellence, and we also extend our gratitude to our customers and trade partners, suppliers and vendors for their continued support.”
In accordance with the sale process under Section 363 of the Bankruptcy Code, the company will solicit competing bids from interested parties. The bidding process is designed to achieve the highest and best value for the company’s assets. Anagram seeks to complete the sale process before year-end, with any sale subject to approval by the court.
The company has filed customary motions seeking court approval to continue its operations during the court-supervised process, including the continued payment of employee wages and benefits without interruption. The company expects to receive court approval for these requests. Anagram has also filed customary motions seeking court approval to continue its customer programs without interruption and expects to continue meeting commitments to customers in the ordinary course and to meet all post-petition obligations to vendors.
Anagram is a subsidiary of Party City Holdco (PCHI), which recently received court approval for its plan of reorganization and emerged from Chapter 11 following its restructuring. Anagram was not part of those proceedings and continues to support PCHI as a valued retail partner.
Anagram is represented by Simpson Thacher & Bartlett as counsel, Ankura Consulting as financial advisor, and RW Baird as investment banker. The Ad Hoc Lender Group is represented by Milbank as counsel and Houlihan Lokey as investment banker.
