Makeup giant Revlon files for Chapter 11

BY Fraser Tennant

Weighed down by debt load, pandemic-related disruptions to its supply chain network and escalating costs, cosmetic maker Revlon, along with certain of its subsidiaries, has filed for Chapter 11 bankruptcy protection.

The company has also experienced stiffer competition as well as struggling to keep pace with changing beauty tastes.

The Chapter 11 filing is intended to allow Revlon to strategically reorganise its legacy capital structure and improve its long-term outlook, especially amid liquidity constraints brought on by continued global challenges, as well as obligations to its lenders.

Upon receipt of court approval, the company expects to receive $575m in debtor-in-possession (DIP) financing from its existing lender base, which in addition to its existing working capital facility, will provide liquidity to support day-to-day operations.

In addition, Revlon has said strong support by its lenders will help the business manage through current macroeconomic challenges and, in turn, enable it to better serve customers.

“Today’s filing will allow Revlon to continue to offer the iconic products we have delivered for decades, while providing a clearer path for our future growth,” said Debra Perelman, president and chief executive of Revlon. “Consumer demand for our products remains strong – people love our brands, and we continue to have a healthy market position.”

According to the filing, Revlon has assets and liabilities between $1bn and $10bn. None of Revlon’s international operating subsidiaries are included in the US Chapter 11 proceedings, except Canada and the UK.

“Our challenging capital structure has limited our ability to navigate macroeconomic issues in order to meet this demand,” added Ms Perelman. “By addressing these complex legacy debt constraints, we expect to be able to simplify our capital structure and significantly reduce our debt, enabling us to unlock the full potential of our globally recognised brands.”

Since its breakthrough launch of the first opaque nail enamel in 1932, Revlon has provided consumers with high quality product innovation, performance and sophisticated glamour. Today, Revlon’s diversified portfolio of brands is sold in approximately 150 countries around the world.

Ms Perelman concluded: “We are committed to ensuring the reorganisation is as seamless as possible for our key stakeholders, including our employees, customers and vendors, and we appreciate their support during this process.”

News: Revlon files for bankruptcy, blames supply chain snags

Prologis to merge with Duke Realty in $26bn deal

BY Fraser Tennant

In a combination that brings together two rivals, warehouse giant Prologis and real estate agency Duke Realty Corporation are to merge in an all-stock transaction valued at approximately $26bn, including the assumption of debt.

Under the terms of the definitive agreement, Duke Realty shareholders will receive 0.475x of a Prologis share for each Duke Realty share they own. The respective board of directors for Prologis and Duke Realty have unanimously approved the transaction.

“We have admired the disciplined repositioning strategy the Duke Realty team has completed over the last decade,” said Hamid R. Moghadam, co-founder and chief executive of Prologis. “They have built an exceptional portfolio in the US located in geographies we believe will outperform in the future. That will be fuelled by Prologis' proven track record as a value creator in the logistics space. We have a diverse model that allows us to deliver even more value to customers.”

With the transaction, Prologis is gaining high-quality properties for its portfolio in key geographies, including Southern California, New Jersey, South Florida, Chicago, Dallas and Atlanta. The portfolio comprises: (i) 153 million square feet of operating properties in 19 major US logistics geographies; (ii) 11 million square feet of development in progress; and (iii) 1228 acres of land owned and under option with a build-out of approximately 21 million square feet.

"This transaction is a testament to Duke Realty's world-class portfolio of industrial properties, long-proven success and sustainable value creation we’ve delivered over the years," said Jim Connor, chairman and chief executive of Duke Realty. “We have always respected Prologis, and after a deliberate and comprehensive evaluation of the transaction and the improved offer, we are excited to bring together our two complementary businesses.

“Together, we will be able to accelerate the potential of our business and better serve tenants and partners,” continued Mr Connor. “We are confident that this transaction – including the meaningful opportunity it provides for shareholders to participate in the growth and upside from the combined portfolio — is in the best long-term interest of Duke Realty shareholders."

The transaction, which is currently expected to close in the fourth quarter of 2022, is subject to the approval of Prologis and Duke Realty shareholders and other customary closing conditions.

“This transaction increases the strength, size and diversification of our balance sheet while expanding the opportunity for Prologis to apply innovation to drive long-term growth,” concluded Tim Arndt, chief financial officer at Prologis. “In addition to generating significant synergies, the combination of these portfolios will help us deliver more services to our customers and drive incremental long-term earnings growth.”

News: Warehouse giant Prologis agrees $26 bln merger with Duke Realty

Cyber security: a race against time

BY Richard Summerfield

According to a report from Crossword Cybersecurity Plc, 61 percent of chief information security officers (CISOs) are only ‘fairly confident’ of managing their current threat exposure to cyber risks.

The report, ‘Strategy and collaboration: a better way forward for effective cybersecurity’, surveyed of over 200 CISOs and senior UK cyber security professionals. Many respondents identified the ‘perfect storm’ of escalating cyber attacks combined with global tech innovation which is causing cyber security professionals to be less confident of the adequacy of their cyber security provisions. Based on the findings, there is concern that cyber security strategies are not able to keep pace with the rate of tech innovation and changes in the threat landscape.

“The picture painted by our research shows CISOs are in urgent need of a strategic rethink,” said Stuart Jubb, group managing director at Crossword Cybersecurity plc. “CISOs need to balance their cybersecurity operation’s daily load with managing the organisation’s long-term requirements. Boards must make sure CISOs have the budget necessary to get short-term issues under control and then begin planning a long-term business-wide strategy. Such a strategy should be supported by a standard operating model with robust processes and policies for the company’s entire supply chain. Every month of delay leaves businesses open to potentially crippling cyberattacks.”

Crossword also asked CISOs about the technology trends they saw as being the most important and relevant over the next 12 months. Several technology categories stood out, with cloud transition and cyber in the cloud leading the way (41 percent), followed by cyber security mesh architecture (CSMA) (35 percent) and artificial intelligence (AI)/machine learning (31 percent).

Respondents also identified a number of other areas of high priority going forward, including closing the cyber skills gap, which can see IT and cyber security teams become quickly overwhelmed if the right expertise is not in place to manage the load, the challenge of gaining consistent and reliable ‘threat intelligence’, and securing digital identity. Respondents were divided over how to address these and other issues, particularly with respect to companies’ short-term cyber goals and the longer-term strategy of many UK organisations.

Report: Strategy and collaboration: a better way forward for effective cybersecurity

Turning Point for Bristol Myers Squibb

BY Richard Summerfield

US pharmaceutical giant Bristol Myers Squibb has agreed to acquire Turning Point Therapeutics in a $4.1bn deal which will boost the company’s oncology drug pipeline.

Under the terms of the deal, Bristol Myers Squibb has agreed to pay $76 per share for each Turning Point share held. The transaction has been unanimously approved by the boards of directors of both companies and is anticipated to close during the third quarter of 2022.

Turning Point is a leader in oncology treatments and its lead asset, repotrectinib, a next-generation, potential best-in-class tyrosine kinase inhibitor (TKI) targeting the ROS1 and NTRK oncogenic drivers of non-small cell lung cancer (NSCLC) and other advanced solid tumours, has helped drive the transaction. In the US, repotrectinib has been granted three breakthrough therapy designations from the Food and Drug Administration (FDA). Bristol Myers Squibb expects repotrectinib to be approved in the US in the second half of 2023. The company also plans to continue to explore the potential of Turning Point Therapeutics’ promising pipeline of novel compounds. Sales of Bristol Myers’ own oncology drug, Opdivo, have fallen below those of rival Merck’s blockbuster treatment in a very crowded oncology market.

“The acquisition of Turning Point Therapeutics further broadens our leading oncology franchise by adding a best-in-class, late-stage precision oncology asset,” said Giovanni Caforio, board chair and chief executive of Bristol Myers Squibb. “With this transaction, we are continuing our strong track record of strategic business development to further enhance our growth profile.”

“Today’s news builds upon our long legacy of pioneering next-generation medicines for patients with cancer,” said Samit Hirawat, chief medical officer, global drug development, at Bristol Myers Squibb. “With repotrectinib, we have the opportunity to change the standard of care and address a significant unmet medical need for ROS1-positive non-small cell lung cancer patients.”

“Through this transaction, we will be able to harness the full potential of our precision oncology platform to advance the standard of care for cancer patients. Since our founding, we have leveraged our deep scientific expertise to develop a pipeline of promising precision oncology assets,” said Athena Countouriotis, president and chief executive of Turning Point Therapeutics. “With Bristol Myers Squibb’s leadership in oncology, strong commercial capabilities and manufacturing footprint, we will be able to further accelerate the pace at which we can bring our novel medicines to benefit people diagnosed with cancer around the world.”

News: Bristol Myers boosts cancer drug portfolio with $4.1 billion Turning Point deal

Embattled TPC Group files for Chapter 11

BY Fraser Tennant

In a move designed to position itself for future growth opportunities, chemical and petroleum-based products provider TPC Group Inc. and certain of its subsidiaries have voluntarily filed for Chapter 11 bankruptcy protection.

In connection with the Chapter 11 filing, the company has entered into a restructuring support agreement (RSA) to implement a financial restructuring with the support of a majority of its secured noteholders that will deleverage and recapitalise its balance sheet and definitively address other legacy liabilities.

The RSA locks in the support of supporting noteholders and sponsors and establishes the framework for the company’s restructuring, which, upon emergence, is expected to resolve all tort liabilities arising from the Port Neches facility incident and eliminate from the company’s balance sheet over $950m of the company’s approximately $1.3bn of secured funded debt.

“A series of unprecedented events including the coronavirus (COVID-19) pandemic, supply chain issues, commodity price increases, higher energy costs and operational challenges resulting from 2021 Winter Storm Uri, as well as the explosion at our Port Neches plant in November of 2019 have caused financial strain for the company,” said Edward J. Dineen, chairman, president and chief executive of TPC Group. “However, we have undertaken many efforts to address the impacts of these events and preserve liquidity, which has given us the necessary time to consider the best path forward for our business and our stakeholders.”

The transactions contemplated by the RSA, once consummated, will result in the TPC Group emerging from bankruptcy with a significantly enhanced liquidity profile by providing for capital infusions in the form of: (i) $450m in connection with two rights offerings and $350m in exit notes; (ii) a $323m delayed draw debtor-in-possession (DIP) financing facility; and (iii) a $200m asset-based revolving DIP facility.

Headquartered in Houston, TPC Group is a leading producer of value-added products derived from petrochemical raw materials such as C4 hydrocarbons, and provider of critical infrastructure and logistics services along the Gulf Coast.

The company expects to continue its operations uninterrupted throughout the Chapter 11 process.

Mr Dineen concluded: “We are confident the Chapter 11 process will bolster our liquidity, substantially improve our debt position, and definitively resolve the liabilities associated with the Port Neches facility incident.”

News: Chemical maker TPC Group files pre-arranged bankruptcy