Large Company Transaction



Large Company Transaction - Aceto Corporation
Steven E. Siesser, Esq., Lowenstein Sandler LLP
Kenneth A. Rosen, Lowenstein Sandler LLP
Steven S. Rogers, Aceto Corporation ℅ Lowenstein Sandler LLP
Rebecca A. Roof, AlixPartners LLP
Mark Buschmann, PJT Partners LP
Reginald Dawson, Wells Fargo Bank, N.A.
Erez E. Gilad, Stroock & Stroock & Lavan LLP
Jayme Goldstein, Stroock & Stroock & Lavan LLP

About the Transaction:
Aceto Corporation, founded in 1947, was an international developer, marketer, seller, and distributor of human health products, pharmaceutical ingredients, and performance chemicals. In April 2018, with looming debt maturities, a large asset impairment, and disappointing operating results, the company’s board of directors, working with its long-time outside counsel Lowenstein Sandler LLP, invited Rebecca A. Roof, a managing director of AlixPartners, to become interim CFO through AlixPartners’ affiliate AP Services Inc. (APS) to succeed the existing CFO, who had resigned, and PJT Partners.

Over the next several months, the company, APS, Lowenstein, and PJT negotiated covenant relief from the company’s secured lenders and assessed the financial performance of Aceto, while also comprehensively evaluating strategic alternatives for the company’s businesses. Ultimately, the board, assisted by its advisors, determined that all of the assets of the company should be marketed and sold through separate transactions for the pharmaceutical operations (Rising) and the chemical operations (Chemicals) in a Chapter 11 Section 363 sale process. Critical to maximizing value for all stakeholders, the company and its advisors structured the transactions to crystallize and preserve significant net operating losses at Rising to offset virtually all of the taxable gain from the Chemicals sale. The decision provided stability and deep capital resources to both Rising and Chemicals, ensuring the continuity of employee, customer, partner, and supplier relationships, while maximizing value for the company’s stakeholders. 

In February and early March 2019, the company entered into two stalking horse purchase agreements to: (1) sell Chemicals’ assets for $338 million in cash (subject to certain adjustments) with the assumption of certain liabilities, including all trade obligations, and the continued employment of most employees and (2) sell Rising’s assets for $15 million in cash with the assumption of certain liabilities, including trade obligations, of up to $122 million. 

As a result of a well-planned transaction structure and marketing process, a competitive bankruptcy auction was developed for Chemicals that led to an increased sale price of $422 million from $84 million. 

Proceeds from the sales satisfied all of the company’s $237 million in secured debt. Additionally, approximately $200 million remained in the estates for distribution to other stakeholders, primarily unsecured bondholders and the few remaining trade and other unsecured creditors, through the development and negotiation of a Chapter 11 plan. Recoveries for Aceto’s unsecured creditors eventually increased from an initial low-case disclosure statement estimate of approximately 70% to an initial distribution of 88%, with the possibility of payment in full to all Aceto creditors and conceivably, a return to equity.

The auctions and resulting two transactions required a multifaceted, multijurisdictional, and internationally coordinated effort among various legal and financial teams, with practice groups such as corporate, M&A, restructuring, regulatory, foreign trade, tax, litigation, securities, and real estate. 

The new owners of both Rising and Chemicals are privately held entities, so no public financial results are available; however, it is believed that both entities’ businesses are flourishing and have been accretive to their respective purchasers.

ConferenceAgenda

Agenda subject to change - all times in CDT
 

Tuesday, September 29, 2020  
8:00 a.m. - 11:30 a.m. 

Morning Coffee Shop Chat Rooms

Sponsored by MACCO Restructuring Group, LLC

8:45 a.m. - 9:00 a.m. Daily Announcements 
9:00 a.m. - 9:30 a.m.

Guided Meditation Class

Sponsored by Ritchie Bros

9:00 a.m. - 10:00 a.m.

Opening Session: Mega Trends 3.0               

Sponsored by Saul Ewing Arnstein & Lehr LLP

10:00 a.m. - 10:20 a.m.  VIP Access with Mega Trends 3.0 Panelists
10:30 a.m. - 11:30 a.m. 

TMA NOW Event 

Sponsored by AlixPartners, LLP

12:30 p.m. - 1:30 p.m.

General Session: Options! Options! Options! Alternatives to Bankruptcy       

Sponsored by Sherwood Partners, Inc.

12:30 p.m. - 3:30 p.m. 

Re-Energized Afternoon Coffee Shop Chat Rooms

Sponsored by MACCO Restructuring Group, LLC

1:30 p.m. - 1:50 p.m.  VIP Access with Options! Options! Options! Alternatives to Bankruptcy panelists 
2:00 p.m. - 3:00 p.m.

Education Session: Contested Issues in DIP Financing in the Uncertain World of Our New Normal

Sponsored by Riemer & Braunstein LLP

2:00 p.m. - 3:00 p.m.

Education Session: Managing Chaos in the Era of Loan Defaults: What Lenders and Borrowers Need to Know

Sponsored by McCarter & English, LLP

4:00 p.m. - 7:00 p.m. 

Spiked Coffee Shop Chat Rooms

Sponsored by MACCO Restructuring Group, LLC

4:00 p.m. - 5:00 p.m.  TMA 101: First-Timers and New Members Event 
5:00 p.m. - 6:00 p.m. 

Education Session: The Dark Days and Nights for the Sports Industry

Sponsored by FTI Consulting, Inc.

5:00 p.m. - 6:00 p.m.

Education Session: Beyond the Transaction: Stories of Post-Merger Integrations

Sponsored by CohnReznick LLP

6:00 p.m. - 7:00 p.m. 

TMA Variety Show 

Sponsored by Ritchie Bros

Wednesday, September 30, 2020  
8:00 a.m. - 8:30 a.m. 

Turnaround Yoga Class 

Sponsored by Ritchie Bros

8:00 a.m. - 11:30 a.m. 

Morning Coffee Shop Chat Rooms 

Sponsored by Newpoint Advisors Corporation

8:45 a.m. - 9:00 a.m. Daily Announcements 
9:00 a.m. - 10:00 a.m.

General Session: They Might Be Giants: The Titans of Today and Their Lessons from Along the Way

Sponsored by Hilco Global

10:00 a.m. - 10:20 a.m.  VIP Access with They Might Be Giants: The Titans of Today and Their Lessons from Along the Way panelists 
10:30 a.m. - 11:30 a.m. 

TMA NextGen Event 

Sponsored by Arch + Beam

12:30 p.m. - 1:10 p.m.

Keynote: Mariana Mazzucato: Never Waste a Crisis: Rethinking Capitalism During COVID-19

Sponsored by Gordon Brothers

12:30 p.m. - 3:00 p.m.

Re-Energized Afternoon Coffee Shop Chat Rooms

Sponsored by Newpoint Advisors Corporation

1:10 p.m. - 1:30 p.m.  VIP Access with Keynote Speaker 
2:00 p.m. - 3:00 p.m.

Education Session: Figuring Out Retail: What Was Already Bad Just Got a Lot Worse

Sponsored by Hilco Global

2:00 p.m. - 3:00 p.m.

Education Session: The Impact of COVID-19 on Higher Education: A Schism of Debt, Endowments, and Educational Challenges, Too

Sponsored by Alvarez & Marsal

4:00 p.m. - 5:00 p.m. 

TMA Awards Celebration: "Better Together Roundtable"

Sponsored by Ritchie Bros

4:00 p.m. - 7:00 p.m. 

Spiked Coffee Shop Chat Rooms

Sponsored by Newpoint Advisors Corporation

5:00 p.m. - 6:00 p.m. 

The Business IMPACT of Diversity and Inclusion: Strategic Conversation Workshop

Sponsored by Burford Capital

6:00 p.m. - 6:20 p.m. VIP Access with Diversity and Inclusion Workshop panelists 
6:00 p.m. - 7:00 p.m.  TMA Family Feud
Thursday, October 1, 2020  
8:00 a.m. - 11:30 a.m. 

Morning Coffee Shop Chat Rooms 

Sponsored by Gulf Coast Business Credit

8:45 a.m. - 9:00 a.m. Daily Announcements 
9:00 a.m. - 9:30 a.m. 

Impact Fitness Class 

Sponsored by Ritchie Bros

9:00 a.m. - 10:00 a.m.

Keynote: Duncan Wardle, Innovation & Creativity in a Virtual World

Sponsored by Burr & Forman, LLP

10:00 a.m. - 10:20 a.m.  VIP Access with Keynote Speaker Duncan Wardle 
10:30 a.m. - 11:30 a.m. 

TMA Talks: International 

Sponsored by Deloitte

12:30 p.m. - 1:30 p.m.

General Session: Will the Patient Survive? The Healthcare Industry in a COVID-19 World

Sponsored by Carl Marks Advisors

12:30 p.m. - 3:00 p.m. 

Re-Energized Afternoon Coffee Shop Chat Rooms

Sponsored by Gulf Coast Business Credit

1:30 p.m. - 1:50 p.m. VIP Access with Will the Patient Survive? The Healthcare Industry in a COVID-19 World panelists 
2:00 p.m. - 3:00 p.m.

Education Session: Intentions in Retention: Ethical Considerations When Being Retained in Bankruptcy Cases     

Sponsored by SM Financial Services Corporation

2:00 p.m. - 3:00 p.m. 

Education Session: Market Liquidity and Impact

Sponsored by Deloitte

3:30 p.m. - 4:00 p.m.  VIP Access 
4:00 p.m. - 7:00 p.m. 

Spiked Coffee Shop Chat Rooms

Sponsored by Gulf Coast Business Credit

4:00 p.m. - 5:30 p.m. 

Virtual Capital Connection + Networking Event

Sponsored by Duff & Phelps, LLC and Getzler Henrich & Associates LLC

5:30 p.m. - 6:30 p.m. 

TMA 'Big Tent' Celebration

Sponsored by Ritchie Bros