Allied Digital Technologies

Situation

ADT was formed through a merger between Allied Digital, Inc. and Vaughn Communications, and was one of the nation’s largest ($200 million in revenues) independent multimedia manufacturers and providers of supply chain management services and videotape duplicating equipment. The merger was financed by bank debt and equity provided by an affiliate of Citicorp Venture Capital.

Engagement

Hoped-for synergies through the merger failed to materialize, and within months the deal sponsor: (i) engaged a crisis manager and, (ii) engaged Gordian Group to seek to effect a sale of all, or parts, of ADT. The bank lenders strongly encouraged a sale process, particularly given that ADT was near a liquidity crisis. Gordian Group advised the Company in connection with its Chapter 11 proceeding, including successfully conducting several complex 363 sales.

Outcome

Within a matter of months, Gordian Group had: (i) prepared a comprehensive Confidential Information Memorandum in conjunction with management, (ii) identified and contacted about 100 potential strategic and financial acquirers, (iii) developed and implemented a strategy to split ADT into two component parts to enable a sale either of the whole, or of component parts, of ADT and, (iv) consummated, through several bankruptcy section 363 sales, a sale of one part of ADT to AmericDisc (a Canadian strategic buyer) and a sale of the other part of ADT to a financial buyer. The sale process was complex and competitive. As a result of the highly successful sale process, values at ADT were maximized.