Acosta Reaches Agreement with Creditors to Eliminate the Company's Long-Term Debt

JACKSONVILLE, Fla., Nov. 8, 2019 /PRNewswire/ -- Acosta, Inc. ("Acosta" or the "Company"), a full-service sales and marketing agency, today announced that it has reached an agreement with more than 70% of its lenders and more than 80% of its noteholders, each by principal amount, on the terms of a comprehensive reorganization and recapitalization.  The deal will eliminate all of the Company's approximately $3 billion of long-term debt.  Further, investors have committed $250 million in new equity capital backstopped by institutions committed to the long-term success of Acosta.

"This is a very positive development for Acosta and our employees, clients, customers and other business partners," said Darian Pickett, CEO of Acosta. "Through this strategic step, Acosta will be well-positioned, both operationally and financially, to make critical investments in our business and drive sales and market penetration for our clients and customers.  Our business remains fundamentally strong, and we are pleased that our new investors recognize the long-term value Acosta can create for our clients and customers.  We all are excited about what the future holds for Acosta."

CONTINUITY OF SERVICE

Acosta's "pre-packaged" Chapter 11 Plan of Reorganization (the "Plan"), described in greater detail below, provides that vendors will be paid in full for goods and services provided before and during the Chapter 11 process, and all employees can expect to receive their usual wages and benefits.  

"This process will enable us to continue to operate our business without disruption to clients, customers, employees, and business partners," said Mr. Pickett.  "Our number one priority always has been to help drive long-term growth for our clients and customers and ensure they are well-equipped to succeed in the competitive consumer landscape.  We look forward to doubling down on this commitment by reinvesting in our people and our capabilities across all retail channels."

Mr. Pickett added, "I would like to thank all of our valued employees, clients, customers, and business partners for their ongoing support."

TERMS OF THE RESTRUCTURING AGREEMENT

The agreement provides for a conversion of all of Acosta's bank and bond debt into equity, an infusion of $250 million in cash, and full satisfaction of other unsecured obligations in the ordinary course of business.  After the restructuring and recapitalization, on a pro forma basis, Acosta will have zero net interest burden and remain significantly cash flow positive with ample liquidity and working capital.  The Company will emerge with the strongest balance sheet in the industry.

Acosta and its lenders have agreed to implement the restructuring through the "pre-packaged" Plan.  Accordingly, Acosta and its U.S. affiliates intend to file voluntary Chapter 11 petitions in the coming weeks.  Acosta's non-U.S. subsidiaries and affiliates are not expected to be included in the upcoming filing or affected by the Chapter 11 process.  Having already received support for the Plan from a supermajority of both its lenders and noteholders, the Company expects to complete the restructuring process quickly.

Kirkland & Ellis LLP is acting as legal counsel for the Company, PJT Partners, Inc. as financial advisor, and Alvarez & Marsal as restructuring advisor.  Davis Polk & Wardwell LLP is acting as legal counsel for an ad hoc group of lenders and Centerview Partners is acting as financial advisor.  White & Case LLP is acting as legal counsel for certain supporting creditors.  Sullivan & Cromwell LLP is acting as legal counsel for certain other supporting creditors.

About Acosta

Acosta is the sales and marketing powerhouse behind most of the trusted brands seen in stores every day. The company provides a range of outsourced sales, marketing and retail merchandising services throughout the U.S., Canada and Europe. For 90 years, Acosta has led the industry in helping consumer packaged goods companies move products off shelves and into shoppers' baskets. For more information, please visit www.acosta.com.

Forward-Looking Statements

In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, Acosta cautions that statements in this communication which are forward-looking, and provide other than historical information, involve risks, contingencies and uncertainties. Although we believe that the expectations reflected in those forward-looking statements are reasonable, we can give no assurance that those expectations will prove to have been correct. Those statements are made by using various underlying assumptions and are subject to numerous risks, contingencies and uncertainties, including, among others: negotiations with third parties; regulatory and other approvals; adverse changes in the markets in which Acosta operates or credit or capital markets; and actions by lenders, other creditors, clients, customers and other business counterparties of Acosta. If one or more of these risks materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected. You should not place undue reliance on forward-looking statements. This communication reflects the views of Acosta's management as of the date hereof.  Except to the extent required by applicable law, Acosta undertakes no obligation to update or revise any forward-looking statement.

Contacts 
Frances Jeter/Danya Al-Qattan 
Sard Verbinnen & Co 
832-680-5120/212-687-8080

SOURCE Acosta, Inc.