Avadim Health, a healthcare and wellness provider, completed a court-approved sale of substantially all its assets to a newly-created company owned by funds managed by Hayfin Capital Management following its Chapter 11 process. The new company will continue to operate under the Avadim name. The sale was approved by the U.S. Bankruptcy Court for the District of Delaware.
On June 1, Hayfin, as Avadim’s existing lender, entered into a binding stalking horse purchase agreement and committed to provide certain debtor-in-possession financing, subject to court approval. These financing commitments, along with Avadim’s cash flow from operations, provided Avadim with the liquidity to continue operating as usual and meet its obligations to its customers, vendors and employees while reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Code and a sale process took place. Following a marketing of Avadim’s assets to other potential buyers by SSG Capital Advisors, Hayfin was certified as the winning bidder.
Keith Daniels of Carl Marks Advisors, who served as chief restructuring officer during the Chapter 11 process, will continue to lead the business as interim CEO. Scott Pasquith, also of Carl Marks Advisors, who served as acting CFO in the same period, will also remain in situ as interim CFO.
“We are delighted to complete this important transaction, which provides certainty to our customers, suppliers and employees and allows us to continue Avadim’s mission of changing lives and transforming communities,” Daniels said. “We now have the flexibility to invest in the development and marketing of our world-class product range, including our hugely popular Theraworx line, and to grow the business further. Avadim has an exciting future and I’m looking forward to working with our talented team as we develop new ways to care.”
“This successful Chapter 11 process has allowed Avadim to address its short-term liquidity issues while preserving its sound underlying business and strong product portfolio,” Howard Rowe, managing director and head of healthcare at Hayfin Capital Management, said. “We have been convinced of Avadim’s growth potential since first lending to it in 2018 and as the new shareholder, we remain fully supportive of the business and the hugely important work it does. Our specialist healthcare investment team has a proven track record of backing ambitious companies like Avadim and we are excited to continue partnering with them to help fund their growth ambitions and bring new products to market.”
Carl Marks Advisory Group, the law firm of Pachulski Stang Ziehl & Jones, the law firm of Chapman and Cutler and SSG Capital Advisors advised Avadim.