Gordian Group served as financial advisor to the Company in connection with its successful plan of reorganization sponsored by a consortium of existing senior lenders and management, which provided a bridge to the subsequent successful sale of the Company within two years.
Case Study
Summit Global Logistics
CLIENT: Summit Global Logistics ("Summit")
Situation
Summit was a $300 million international third-party logistics (“3PL”) provider specializing in international forwarding and customs brokerage services for North America, Asia Pacific and Europe, and contract logistics and trucking in the United States. A public roll up financed through a complicated capital structure of senior debt, junior secured convertible notes (the “CNs”) and PIPE securities, Summit faced severe liquidity and capital structure problems within a year of formation as a result of a “perfect storm” on its business and operations. Moreover, the CNs were comprised of a disgruntled and hostile group of hedge funds that had only months earlier provided $15 million of funding and less than a year earlier had provided $70 million in funding, only to have the Company default within months.
Engagement
Gordian Group was engaged by Summit and the Independent Committee, after Summit had terminated several investment banks previously, to work towards a consensual transaction with the CNs, a paramount goal of the Company. As a result of liquidity constraints and stalled negotiations with its junior creditors, we developed a plan for the Company to file bankruptcy with a stalking-horse bid funded by management and the senior lenders to put a stake in the ground to provide comfort to customers and vendors and to encourage the CNs to join the deal, which otherwise would have left them with a zero recovery.
Gordian Group was able to successfully navigate through these difficult deal dynamics, as well as provide the Court with the necessary comfort to approve a deal in which management directors had significant participation.
Outcome
The ultimate transaction, which resulted in Summit being sold consensually to a consortium of management, the senior lenders and the CNs, allowed the Company to emerge with a far less onerous capital structure and a huge management ownership stake. Within two years of closing, the Company was able to sell itself to a major international strategic at an advantageous valuation.