Strike entered into an asset purchase agreement with affiliates of American Industrial Partners, the company’s largest debtholder, pursuant to which American Industrial Partners will acquire substantially all of Strike’s assets.
To facilitate the transaction process, Strike filed voluntary petitions for a court-supervised restructuring under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. This action is expected to provide for a sale of the company’s assets under Section 363 of the bankruptcy code, with American Industrial Partners serving as the stalking horse bidder in a court-supervised auction and sale process. Accordingly, the proposed transaction with American Industrial Partners is subject to higher or otherwise better offers, court approval and other customary conditions.
In connection with the proposed sale transaction, Strike received a commitment for approximately $29 million in debtor-in-possession financing from American Industrial Partners. Upon court approval, this new financing, together with cash generated from Strike’s ongoing operations, is expected to support the business throughout the sale process. Strike expects to operate in the ordinary course throughout the process.
“The sale and financing agreements with AIP mark an important step forward in our efforts to strengthen our business and position the company to continue meeting and exceeding the needs of our customers well into the future,” Chuck Davison Jr., CEO of Strike, said. “Since I joined Strike in July, the board and management team have taken a fresh look at the business to evaluate how best to build on our brands’ strong position in the marketplace, improve our financial position and set Strike on a path for future success. Based on this review, we have determined that initiating a court-supervised sale process is the optimal path forward for our business and is in the best interest of all our stakeholders.
“AIP’s interest in Strike is a testament to the value they see in the services we provide our customers and the strength of our talented team. We are as dedicated as ever to operating safely and providing our customers with the same level of quality and service that they have come to expect. We thank our customers for their support and appreciate the continued cooperation of our partners, who play a key role in helping us bring our services to market. We continue to go the extra mile for our customers every day, and we appreciate our associates’ hard work and commitment to Strike.”
Strike filed multiple customary motions seeking court authorization to continue to support its operations during the court-supervised sale process, including the continued payment of employee wages and benefits. The company intends to pay vendors, suppliers and other trade creditors in full under normal terms for goods and services provided during the bankruptcy case. Strike expects to receive approval for these requests.
White & Case is serving as Strike’s legal counsel, and Opportune is serving as its financial and restructuring advisor.
