BY Fraser Tennant
Against a backdrop of slowing revenue and an inability to obtain fresh investment, adtech giant Sizmek, along with a number of its subsidiaries, has filed for Chapter 11 bankruptcy protection.
The company has stated that it initiated voluntary proceedings to allow it to preserve value and seek access to capital while it continues to review strategic alternatives.
As the world's largest independent buy-side advertising platform, Sizmek operates in more than 70 countries, with local offices in many countries providing award-winning service throughout the Americas, Europe, the Middle East and Africa (EMEA) and Asia-Pacific (APAC).
Subsidiaries included in the Chapter 11 filing are Sizmek Inc., Sizmek DSP, Inc., Sizmek Technologies, Inc., Wireless Artist LLC, Wireless Developer, Inc., X Plus One Solutions, Inc., X Plus Two Solutions, LLC, and Point Roll, Inc.
In a statement on its website, Sizmek said: “We are confident this process is the best possible option. Importantly, Sizmek is open for business. The US Chapter 11 process – unlike bankruptcy schemes in other geographies – is specifically designed for companies like ours to operate as usual while working to resolve financial issues. Our board and management team continue to explore all available options, including a potential sale.”
In the months prior to the filing, Sizmek had been discussing with stakeholders how to address its over-leveraged balance sheet. However, despite these discussions, Sizmek’s primary lender assumed control of Sizmek’s bank accounts and sought to divert customer receivables – thereby cutting off access to capital.
“Chapter 11 protection is the only responsible mechanism by which we can seek access to capital and preserve value while continuing to explore value-maximising alternatives,” continued the statement. “We are aggressively seeking to access our existing cash, and intend to fully resume normal-course operations as soon as possible.”
The Sizmek statement concluded: “We are committed to serving clients to the same high standard they have come to expect and are working diligently to ensure platforms experience as little interruption as possible.”