GTT exits Chapter 11 bankruptcy

BY Richard Summerfield

Following its collapse in late 2021, GTT Communications has finally exited its Chapter 11 bankruptcy and restructuring processes, having removed $2.8bn from its debt pile and brought in new investors.

The company, which filed for Chapter 11 bankruptcy in October 2021, has agreed a deal with key creditors to amend its reorganisation plan in light of current macroeconomic challenges. As part of the Chapter 11 plan, GTT sold its infrastructure division to I Squared Capital for $2.1bn. That gave the company a head-start on paying off its debts. Now GTT has reduced its debt by approximately 80 percent, according to a statement from the company.

“Today marks the beginning of an important new chapter for GTT,” said Ernie Ortega, chief executive of GTT. “Over the past two years, we have concentrated relentlessly on transforming our business into a customer-focused, managed services provider with a culture of continuous improvement. As we begin 2023 on a new path, I’m tremendously excited about the opportunities ahead.

“We have more exciting developments to share in the coming weeks, but right now I want to thank our employees, customers, and partners, whose confidence in GTT has underpinned our commitment to realizing this Company’s incredible potential. Thanks to these stakeholders, GTT has succeeded in completing its financial restructuring with a renewed focus on customer experience, operational efficiency, and providing the best of what our industry can offer to customers and partners across the globe,” Mr Ortega said.

As part of the company’s restructuring, GTT had previously announced a new board of directors, including a new chairman of the board, Tony Abate. With GTT’s completion of its financial restructuring process, Beau Harbour, managing director at Lone Star, and Alex Grau, managing director at Hudson Advisors L.P., an investment adviser to Lone Star, have joined GTT’s board. Affiliates managed by Lone Star Funds, Anchorage Capital Group, Fidelity Management & Research Co. and Cheyne Capital, collectively, comprise the new investor leadership and own a majority of GTT’s reorganised equity, according to a company statement.

“The Company’s Board and new owners are looking forward to working with Ernie and the entire GTT team to build on the Company’s momentum and our shared vision to serve businesses with network, security and communications needs across multiple locations globally,” said Mr Abate. “GTT is well-positioned to capture the growing demand for bandwidth, cyber-security and managed services as enterprises optimize the performance of their own SaaS and cloud-based applications anywhere in the world.”

Prior to its bankruptcy filing, GTT spent extravagantly on other business, buying companies such as Hibernia Express and Interoute.

News: Chapter 11 Bankruptcy Concluded, GTT Communications Eyes 2023

BC Partners to acquire Madison Logic from Clarion

BY Fraser Tennant

In a deal that underscores its deep expertise in technology enabled services and digital marketing, international investment company BC Partners is to acquire a majority stake in account-based marketing (ABM) platform Madison Logic from New York based private equity (PE) firm Clarion Capital Partners.

The terms of the deal have not been disclosed.

Established in 1986, BC Partners has played an active role for over three decades in developing the European buyout market. Since its foundation, BC Partners has completed over 124 PE investments in companies with a total enterprise value of over €160bn and is currently investing its eleventh PE buyout fund.

“Madison Logic embodies the key themes that we look for at BC Partners and within the technology sector,” said Raymond Svider, chairman of BC Partners. “It is an industry leader in a secularly growing market with multiple avenues for growth and a strong management team. The business is the ideal platform to invest in this attractive segment of the market.”

Moreover, BC Partners will support the ABM platform management team to continue to provide unsurpassed services, as well as accelerate its growth trajectory with access to additional capital to invest in the business and its technology to further drive organic and inorganic growth through increased technology platform functionality and service delivery. BC Partners will also expand capabilities in new industries, geographies and advertising mediums.

“Madison Logic has grown substantially and established its leadership position in the market,” said Tom O'Regan, chief executive of Madison Logic. “We are thrilled to now continue in the next stage of our very ambitious growth path, and confident that this will unlock significant new growth opportunities across the business.”

With the support of Clarion, Madison Logic has taken market share through rapid organic growth, driven by a highly targeted go-to-market strategy and investments in technology.

“The execution by the Madison Logic team has been nothing short of incredible as they have scaled the company to become a global leader in account based marketing," said David Ragins, a managing director at Clarion. “It has been a pleasure being part of such a great company and we wish the team continued success with their new partner.”

The transaction is subject to customary regulatory and antitrust approvals.

Mr Syider concluded: “Consistent with our ‘owner-operator’ mindset, we are excited to partner with Madison Logic to execute their strategy and support them in further developing their technology and services offerings.”

News: BC Partners to acquire account-based marketing firm Madison Logic

Space company Maxar acquired by Advent for $6.4bn

BY Fraser Tennant

In a transaction that takes the space technology company private, Maxar Technologies is to be acquired by global private equity (PE) firm Advent International for approximately $6.4bn.

Under the terms of the definitive agreement, which has been unanimously approved by Maxar’s board of directors, Maxar stockholders will receive $53 in cash for each share of common stock they own.

As a private company, Maxar will be able to accelerate investments in next-generation satellite technologies and data insights that are vital to the company’s government and commercial customers, as well as pursue select, strategic M&A to further enhance its portfolio of solutions.

“Advent has a proven record of strengthening its portfolio companies and a desire to support Maxar in advancing our long-term strategic objectives,” said Daniel Jablonsky, president and chief executive of Maxar. “As a private company, we will have enhanced flexibility and additional resources to build on our strong foundations, further scale operations and capture significant opportunities in a rapidly expanding market.”

Headquartered in the US, Advent has a demonstrable track record as a responsible owner of defence and security businesses. Following the close of the transaction, Maxar will remain a US-controlled and operated company.

“We have tremendous respect and admiration for Maxar, its industry-leading technology and the vital role it serves in supporting the national security of the US and its allies around the world,” said David Mussafer, chairman and managing partner of Advent. “We will prioritise Maxar’s commitment as a core provider to the US defence and intelligence communities, and allies, while providing Maxar with the financial and operational support necessary to apply its technology and team members even more fully to the missions and programmes of its government and commercial customers.”

The transaction is expected to close mid-2023, subject to customary closing conditions, including approval by Maxar stockholders and receipt of regulatory approvals.

Mr Jablonsky concluded: “This transaction is an exceptional outcome for stockholders and is a testament to the hard work and dedication of our team, the value Maxar has created and the reputation we have built in our industry.”

News: Advent to buy satellite operator Maxar Technologies for about $4 billion

L3Harris to acquire Aerojet Rocketdyne for $4.7bn

BY Richard Summerfield

L3Harris Technologies Inc. has agreed to acquire rocket engine manufacturer Aerojet Rocketdyne Holdings Inc. in a deal valued at around $4.7bn.

Under the terms of the deal, which is expected to close in 2023, subject to required regulatory approvals and clearances and other customary closing conditions, L3Harris will pay $58 per share, in an all-cash transaction valued at $4.7bn, inclusive of net debt. L3Harris will use existing cash and issue new debt to fund the deal

The deal marks L3Harris’ second acquisition announcement of 2022 after previously agreeing to acquire Viasat’s tactical data links unit, which provides data and voice communications systems for military vehicles, aeroplanes and ships, for $1.96bn.

Lockheed Martin, the world’s largest defence contractor by revenue, tried to buy the Rocketdyne for $4.4bn before abandoning the bid after federal regulators sued in January to block it. The Federal Trade Commission (FTC) noted that Lockheed would use its ownership of Aerojet to damage other defence companies and would ultimately control multiple defence programmes critical to national security.

“We’ve heard the DoD leadership loud and clear: they want high-quality, innovative and cost-effective solutions to meet both current and emerging threats, and they’re relying upon a strong, competitive industrial base to deliver those solutions,” said Christopher E. Kubasik, chief executive and chair of L3Harris. “With this acquisition, we will use the combined talents of more than 50,000 employees to drive continuous process improvement, enhance business operations and elevate the performance of this crucial national asset.”

“This agreement will accelerate innovation for national security propulsion solutions while providing a premium cash value for our shareholders and tremendous benefits for our employees, customers, partners and the communities in which we operate,” said Eileen P. Drake, chief executive and president of Aerojet Rocketdyne. “Joining L3Harris is a testament to the world-class organization and team we’ve built and represents a natural next phase of our evolution. As part of L3Harris, we will bring our advanced technologies together with their substantial expertise and resources to accelerate our shared purpose: enabling the defense of our nation and space exploration. This is an exciting new chapter for Aerojet Rocketdyne and our over 5,200 dedicated team members, providing them with additional opportunities, and we look forward to working closely with L3Harris to complete this transaction.”

Aerojet Rocketdyne currently generates around $2.3bn in annual revenue. The company’s employees operate out of advanced manufacturing facilities across the US. L3Harris has more than $17bn in annual revenue and customers in more than 100 countries.

News: Defense firm L3Harris to buy Aerojet for $4.7 bln with eye on missile demand

FedNat files for Chapter 11 bankruptcy protection

BY Fraser Tennant

Three months after the liquidation of FedNat Insurance Company, regional insurance holding company FedNat and certain of its wholly-owned subsidiaries have filed for Chapter 11 bankruptcy.

The Florida-based FedNat filed for bankruptcy after an increase in severe weather events in the state weighed on its balance sheet. In 2021, catastrophe losses cost FedNat $800m on a gross basis, although reinsurance and other recoveries reduced that loss to $86m, according to bankruptcy court papers.

Listing $33.8m of assets and $171m of debts in its petition in the United States Bankruptcy Court for the Southern District of Florida, FedNat’s bankruptcy filing underscores Florida’s deepening home insurance crisis, where average premiums are nearly triple the national average.

As an industry, the Florida property insurance industry lost over $1.6bn in 2020 and over $1.5bn in 2021, thanks to losses from catastrophes, higher reinsurance costs and litigation abuse. In addition, at least five other Florida insurers have been put into receivership by the state’s regulator in 2022.

As part of the Chapter 11 process, the company has stated that it will evaluate all strategic alternatives to maximise value for stakeholders, whether that be a reorganisation of its business or a sale of its assets.

FedNat has approximately $6.5m of cash on hand, which will provide liquidity to support day to day operations during the Chapter 11 process, enabling the company to operate business uninterrupted, including the timely payment of employee wages and benefits and continued servicing of customers.

Additionally, the company will file customary “First Day” motions to allow it to maintain operations in the ordinary course. The company intends to pay its employees in the usual manner and continue their primary benefits and certain customer programmes without disruption.

FedNat expects to receive court approval for all these routine requests.

To manage the restructuring process, FedNat has engaged GGG Partners, LLC as financial advisers and Nelson Mullins Riley & Scarborough LLP as legal advisers.

FedNat is an insurance holding company that controls substantially all aspects of the insurance underwriting, distribution and claims processes through its subsidiaries, equity investments and contractual relationships with independent agents and general agents.

News: Three Months After Liquidation, FedNat Holding Co. Files Chapter 11 Bankruptcy