Forma Brands files for Chapter 11

BY Fraser Tennant

Following a string of supply chain issues and store closures, global multi-brand beauty company Forma Brands, the parent company of cosmetics manufacturer Morphe, has filed for Chapter 11 bankruptcy protection.

In addition to the filing, Forma Brands’ holding company FB Debt Financing Guarantor has entered into a definitive asset purchase agreement with a group of secured lenders, which will acquire all of Forma Brands’ assets.  

The proposed transaction is expected to significantly strengthen Forma Brands' financial position and provide additional support for the execution of its long-term growth strategy, which will focus largely on the company's global wholesale and e-commerce operations.

“Over the last year, Forma Brands has been implementing initiatives to stabilise our business and reposition our organisation for long-term growth,” said Simon Cowell, president of Forma Brands. “This agreement is a testament to the strength of our brands most meaningful to our consumers, including Morphe and Morphe 2.”

Moreover, Forma Brands has received a commitment for approximately $33m in debtor-in-possession (DIP) financing from the investor group, which, subject to court approval, will be available to support the business and its operations throughout the court-supervised sale process. The agreement with the investor group includes Forma Brands' wholesale operations, online platforms and international Morphe retail stores.

“We will have additional financial resources available to invest in our multi-category portfolio, product launches and innovative brand and marketing strategy as we advance our vision to inspire creativity, promote inclusivity and connect with consumers around the world through beauty,” continued Mr Cowell. “We are excited to reinforce our focus on opportunities and to continue bringing our thoughtfully selected beauty products to consumers through our individual online brand platforms, retail partners and Morphe stores outside the US.”

Throughout the Chapter 11 and sales process, Forma Brands’ customers can continue to shop the company’s portfolio of brands through the brands' online platforms, at leading specialty retailers and through the company's international Morphe retail stores.

Mr Cowell concluded: “We appreciate the continued support of our financial partners and believe this is the best path forward for Forma Brands as we position the business for the long term.”

News: Forma Brands Enters Into Agreement To Be Acquired By Group Of Secured Lenders

Duck Creek acquired by Vista in $2.6bn transaction

BY Fraser Tennant

In a deal that will see it become a privately held company, intelligent solutions provider Duck Creek Technologies is to be acquired by global investment firm Vista Equity Partners in an all-cash transaction valued at approximately $2.6bn.

Under the terms of the definitive agreement, Duck Creek shareholders will receive $19 per share in cash, which represents a 46 percent premium to Duck Creek’s closing stock price on 6 January 2023.

The merger agreement with Vista Equity Partners was approved following the recommendation of a special committee of the Duck Creek board of directors.

“This transaction is a testament to the value of the Duck Creek platform, the success of our strategy and the strength of our incredible team,” said Michael Jackowski, chief executive of Duck Creek. “Following a deliberate and thoughtful process, the board approved this transaction which delivers a great outcome for Duck Creek’s shareholders, providing them a certain and substantial cash value at an attractive premium.”

The deal terms of the merger agreement include a ‘go-shop’ period expiring 7 February 2023, which allows Duck Creek’s board of directors and its advisers to actively initiate, solicit and consider alternative acquisition proposals from third parties.

Founded in 2000 and headquartered in Boston, Duck Creek provides cloud-based property and casualty insurance solutions to its customers including Berkshire Hathaway Specialty Insurance and American International Group.

“Duck Creek is playing an outsized role in accelerating cloud strategies and unlocking all the advantages they provide this crucial sector of today’s economy,” said Monti Saroya, senior managing director and co-head of Vista’s flagship fund. “Duck Creek’s modern cloud architecture and demonstrated market traction position it to define the next generation of mission-critical technology for P&C insurance.”

The transaction is expected to close in the second quarter of 2023, subject to the satisfaction of customary closing conditions, including approval by Duck Creek’s stockholders and US antitrust clearance.

“Vista has an established track record of partnering with leading enterprise software businesses within the insurance industry and related verticals,” concluded Jeff Wilson, managing director at Vista. “We are excited to work with the Duck Creek team as we look to build on their best-in-class platform and solutions, which serve many of the world’s leading P&C insurance carriers.”

News: Vista to take Duck Creek Technologies private in $2.6 bln deal

AstraZeneca strikes $1.8bn CinCor deal

BY Richard Summerfield

Multinational pharmaceutical and biotechnology company AstraZeneca has agreed to acquire US-based drug developer CinCor Pharma Inc in a deal worth up to $1.8bn.

Central to the transaction is CinCor’s experimental therapy baxdrostat, which is in development to treat conditions including high blood pressure and chronic kidney disease. Under the terms of the merger agreement, AstraZeneca will pay $26 per share in cash at closing plus a non-tradable contingent value right of $10 per share in cash payable upon a specified regulatory submission of a baxdrostat product.

The upfront cash portion of the consideration represents a transaction value of approximately $1.3bn and a premium of 121 percent over CinCor’s closing market price on 6 January 2023. Total consideration including the contingent value right, if the milestone is achieved, would be approximately $1.8bn and a 206 percent premium over CinCor’s closing market price on 6 January 2023. CinCor’s board of directors has unanimously approved the transaction.

The deal will also see AstraZeneca, which is keen to expand its pipeline of treatments for heart and kidney disorders, gain approximately $522m in cash and marketable securities on CinCor’s balance sheet.

AstraZeneca believes that baxdrostat will complement its strategy to provide more treatments for cardiorenal diseases, an area that has a “high unmet medical need”. The company added that baxdrostat could be combined with its chronic kidney disease drug Farxiga.

“We are excited about the proposed acquisition of CinCor Pharma by AstraZeneca as we believe it offers the prospect of accelerating the development timeline and expanding the breadth of benefits patients with cardiorenal diseases might obtain from baxdrostat, if approved,” said Marc de Garidel, chief executive at CinCor. “CinCor is committed to ensuring a smooth transition of the development responsibilities to AstraZeneca once the acquisition is consummated. Thank you to all who have played, and will continue to play, essential roles in developing and evaluating baxdrostat as a potential novel treatment for cardiorenal diseases.”

“AstraZeneca’s shared commitment to addressing the unmet medical need for patients with hypertension and cardiorenal disease will accelerate CinCor’s mission to develop and deliver life-changing therapies that improve patient care,” said James Healy, chairman of CinCor’s board of directors and managing partner at Sofinnova Investments. “The CinCor management team has laid very important scientific and clinical groundwork for the baxdrostat program, including the successful Phase 2 BrigHtn trial that was recently published in the New England Journal of Medicine. On behalf of CinCor’s Board of Directors, I would like to recognize and thank the CinCor team, scientific advisors and patients for their dedication and contributions to the advancement of the development of baxdrostat.” 

News: AstraZeneca boosts heart, kidney business with $1.8 bln CinCor deal

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