Arecont Vision files for Chapter 11 bankruptcy protection as part of restructuring effort
Arecont Vision on Monday announced that it has filed for Chapter 11 bankruptcy protection as part of a restructuring effort that is expected to result in the company being sold to a private equity firm. In a statement, the video surveillance solutions manufacturer said that it will execute an asset purchase agreement with an affiliate of Turnspire Capital Partners, LLC, under which Transpire will acquire substantially all of Arecont Vision’s assets.
Though they are filing for Chapter 11 restructuring, the company emphasized that they are not going out of business and that the filing is a merely a way for them to reorganize and clear debt, which has weighed heavily on the company over the last few years, from their balance sheet. This will subsequently give Arecont Vision a fresh start with new owners, who will be investing in new product development and future growth.
“Through this transaction, Arecont Vision will shed its debt and make bolder decisions to invest in our future versus maintain the status quo. We are excited to have found a partner in Turnspire who shares our vision and will ensure an exciting future for the Company to the benefit our customers, employees, and partners,” said Raul Calderon, Chief Operating Officer and General Manager for Arecont Vision. “Manufacturing, customer service, and sales activities will continue uninterrupted. Our employees will receive their wages and benefits as before, and our own vendors and suppliers will be paid in the ordinary course of business going forward.”
The company said it intends to file a bid procedures and sale motion along with the purchase agreement with the court in the coming days. Current management will continue to lead the company, business will continue uninterrupted, and operations will be supported by debtor-in-possession (DIP) financing provided by Arecont Vision’s current secured lenders. The Turnspire bid will be subject to an auction at which it will be subject to higher and better offers, and require court approval. Arecont Vision anticipates the transaction will move swiftly and close within 60-75 days.
“Arecont Vision implemented key strategic initiatives beginning in mid-2017 that continue in the current year, all aimed at enhancing customer engagement, increasing revenue, and optimizing business processes. The goal is to better address the needs of the market and maintain and expand our industry technology leadership,” added Calderon. “While these efforts bore fruit immediately, we can now accelerate that progress unburdened by excess debt. Ultimately it was determined that using the chapter 11 process to facilitate a reorganization and sale was the swiftest and most efficient way to reduce debt while accelerating sales growth and product development.”
In a move indicative of its new direction, Arecont Vision at ISC West in Las Vegas last month announced that it was moving beyond just providing video surveillance hardware with the unveiling of its Contera line of solutions, which includes a new video management system, cloud managed video recorders and web services.
Court filings as well as other information related to the restructuring are available at www.omnimgt.com/arecont or by calling the restructuring information hotline, 844-378-2736 (toll free in North America) or +1-818-906-8300 (International).
The company is advised by the law firm of Pachulski, Stang, Ziehl & Jones LLP, Armory Strategic Partners as the Company’s chief restructuring officer and financial advisor, and Imperial Capital as the company’s investment banker.
