Cambium Learning Group

Situation

The Company, which provides research-based, culturally responsive and proven instructional materials, services and technology to help educators raise the achievement level of Pre-kindergarten through Grade 12 students underserved by existing instructional materials, was acquired in 2007 by the private equity investor. In conjunction with that transaction, and by the time of Gordian’s involvement in mid-2008, the Company had approximately $195mm in net financial indebtedness outstanding, including a $127mm senior secured facility and a $50mm mezzanine facility.

The Company was in breach of certain covenants under its credit agreements, for reasons having nothing to do with financial performance. Prior to, and during our involvement, certain of the Company’s lenders had been attempting to drive through a financial restructuring on terms that would have been disastrous for the Company’s equity holders.

Gordian Group was able to devise strategies to create optionality and regain negotiating leverage. As a first step, the Company was able to effectively engage with its lenders and successfully negotiate an extension to its temporary waiver and amendment agreement in advance of the permanent waiver and amendment to its credit facilities.

Engagement

Gordian Group was retained by counsel to a leading private equity investor as a special advisor with respect to the restructuring of the Company’s financial indebtedness.

Outcome

Ultimately, Gordian Group and counsel were instrumental in a consensual restructuring on the Company’s own terms and, importantly, the preservation of the ownership and control position of its existing equity holders. Less than two years later, the Company merged with a direct competitor at a valuation highly advantageous to the Company’s equity holders and Gordian Group provided an opinion in connection with the merger.