BY Fraser Tennant
As a result of pandemic headwinds, closure of factories, labour shortages and continued slowdown in network optimisation sales, US information technology company Riverbed Technology has filed for Chapter 11 bankruptcy in order to implement a pre-packaged restructuring support agreement (RSA).
The RSA will allow Riverbed to reduce its debt by more than $1bn, add a total of $100m of investment capital and significantly simplify its balance sheet – fuelling its next phase of growth, and positioning the company for long-term success.
Riverbed entered into the RSA with its equity sponsors and an ad hoc group of lenders holding a super-majority of its funded secured debt. Once the restructuring transactions, which are subject to customary closing conditions, are complete, the ad hoc group of institutional investors – which includes Apollo Global Management – will become the majority owners of Riverbed.
“We are continuing to move forward with our accelerated recapitalisation,” said Dan Smoot, president and chief executive of Riverbed Technology. “After thoroughly evaluating the different mechanisms through which to implement the recapitalisation, our analysis made it clear that Riverbed could achieve a cleaner, more financially beneficial outcome by utilizing the court-supervised process, setting our company up for even greater growth and innovation opportunities in the future.”
Riverbed expects to successfully complete its financial restructuring process and emerge in from Chapter 11 bankruptcy in mid-December. In the meantime, Riverbed’s operations and the acceleration of its strategy will continue as normal.
“We are pleased to continue our long-term support of Riverbed in this next chapter as they strengthen their financial position to deliver leading performance and visibility solutions to companies around the world,” said Chris Lahoud, a partner at Apollo Global Management. “Riverbed has an exceptional team and strong market opportunities, and we are confident in their strategy to deliver innovative customer solutions and long-term profitable growth.”
Founded in 2002, Riverbed solutions enable organisations to visualise, optimise, remediate and accelerate the performance of any network for any application, while supporting business objectives to mitigate cyber security risk and enhance the digital experience for all end-users.
Mr Smoot concluded: “The overwhelming support we have received from our investors is a testament to their confidence in our growth prospects and in Riverbed following the recapitalisation. Furthermore, since we announced this development, many of our customers and business partners have voiced their support and confidence in Riverbed.”
News: Riverbed Technologies files for Chapter 11 bankruptcy protection following pandemic headwinds