CLIENT
A casual family-focused seafood restaurant chain with approximately 30 locations in the Southeast U.S. (the “Company”).
SITUATION
As sales came to a screeching halt in March 2020 due to the impacts of the global COVID-19 pandemic, our client faced a severe liquidity crisis losing approximately 95% of its sales. By the end of March, the Company was operating 11 of its stores on a take–out only basis and was in default of its senior secured debt. The Company was forecasting to run out of cash within 90 days with liquidation of the business imminent.
ENGAGEMENT
In connection with a forbearance agreement with its lenders, the board of directors of the Company retained G2 to provide expertise in quickly finding a solution that would save the business. Jeffrey T. Varsalone, a Managing Director at G2, was appointed Chief Restructuring Officer (“CRO”) and through the CRO, G2 assisted the board in actively navigating complex stakeholder dynamics during a time when market instability was at an all-time high due to the continued pandemic. G2 developed and executed liquidity management tactics to maximize runway for a potential restructuring transaction and assessed strategic options for the Company and its stakeholders. With a focus on maximizing value for creditors and preserving jobs, G2 provided the board with restructuring expertise in negotiating a consensual resolution with the Company’s lenders and facilitating a restructuring transaction that preserved the going concern.
OUTCOME
G2 implemented a tailored, expedited restructuring transaction process that resulted in the sale of the senior debt and the subsequent consummation of a credit bid going concern asset sale transaction in June 2020. “The lightning fast execution of this restructuring mandate maximized value for the Company’s lenders and provided recovery for junior creditors”, said Jeffrey T. Varsalone, the Company’s Chief Restructuring Officer. “The transaction provided an ongoing customer for trade vendors and an ongoing tenant for landlords at a time when retail vacancies are sky rocketing”, Varsalone continued. “Most importantly G2 takes great pride in being able to assist the board in saving over 500 jobs at a time when the annualized unemployment rate was at an all-time high”, Varsalone concluded.
About G2 Capital Advisors
G2 Capital Advisors provides M&A, capital markets and restructuring advisory services to the middle market. We offer integrated, multi-product and sector-focused services by pairing highly experienced C-level executives with specialist investment bankers. We aspire to be the trusted advisor of choice to our clients including corporations and institutional investors.
Securities offered through Hollister Associates, LLC, Member FINRA & SIPC.
G2 Capital Advisors, LLC and Hollister Associates, LLC are separate and unaffiliated entities.
CONTACTS ON THIS DEAL:
Jeffrey Varsalone, Managing Director, Restructuring: T: 516.410.6215 E: [email protected]
Matt Powers: Associate, Restructuring: T: 940.395.3714
E: [email protected]
CLIENT
At its inception more than 55 years ago, the original vision of The Paper Store (“TPS” or the “Company”) was to serve as a local retailer offering newspapers, magazines, greeting cards and school supplies. Since then, The Paper Store has expanded beyond its original vision and has grown organically from a “mom-and-pop” shop to a regionally renowned specialty retailer. Today, The Paper Store is one of the leading specialty gift chains in the Northeast with 86 locations in 7 states.
SITUATION
TPS had experienced a significant decline in store traffic and related consumer spending, as well as numerous operational challenges as a result of the COVID-19 pandemic, especially on account of actions taken in response to the public health crisis. Mandated store closures significantly contributed to missed sales targets, unsold inventory, and depressed profit margins. The Company could no longer cover its pre-bankruptcy debt service and was facing an impending liquidity crisis given working capital requirements leading in to the holiday season. Prior to filing, TPS pursued several strategic alternatives to address the liquidity need and balance sheet challenges but was not able to reach consensus across the interested parties.
ENGAGEMENT
TPS engaged G2 Capital Advisors, LLC (“G2”) as its restructuring advisor in June 2020, following the liquidity and operational challenges to examine strategic alternatives and stabilize operations. Following an inability to reach an out-of-court solution with the key stakeholders, TPS expanded G2’s role by appointing Don Van der Wiel as Chief Restructuring Officer (“CRO”). The Company subsequently filed for Chapter 11 bankruptcy to facilitate a going concern sale of the Company. Through the CRO role, G2 became the chief fiduciary tasked with creating sufficient runway to preserve going concern value and maximizing potential recovery for all stakeholders. Through the CRO role, G2 actively navigated complex stakeholder dynamics, during a time when market instability was at an all-time high due to the continued pandemic. G2 developed and executed liquidity management tactics to maximize strategic options for the Company, as well as managed all transactional and bankruptcy proceeding timelines. With a long-term focus on maximizing value, G2 supported TPS’s sale process, leading to efficient and expeditious transaction execution.
Tom Anderson, President & CEO of The Paper Store said, “G2 was a true partner for The Paper Store as we navigated the highly disruptive impacts of Covid 19 across our business. The G2 team, with its operational and financial advisory capabilities, quickly understood our Company and situation, developed a set of strategic alternatives, and then assisted us in executing the strategy, resulting in a stabilization of day-to-day operations and the long term survival of the Company.”
OUTCOME
G2 provided day-to-day liquidity and process management support throughout the bankruptcy proceedings, including leading a tailored transaction process resulting in the signing of an asset purchase agreement in August 2020 and an eventual going concern sale of TPS on September 1, 2020 under Section 363 of the Bankruptcy Code for $22MM in cash consideration, plus the assumption of certain liabilities.The highly efficient court case process took 49 days from the petition filing date to the closing of the transaction.
Throughout the engagement and culminating with the successful transaction, G2 was able to assist the company in preserving nearly 2,000 jobs across the TPS platform. The strategic execution of the engagement also created significant value for junior creditors in terms of assumed liabilities.
“We are very proud of G2’s contributions to help TPS navigate through the complex challenges presented by the COVID-19 pandemic. The blend of our operational turnaround and transactional experience proved invaluable in allowing us to support the unique requirements of this project in an overall tough retail landscape.” – said Jeffrey Unger, CEO of G2 Capital Advisors.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. served as the Company’s bankruptcy counsel and SSG Capital Advisors, LLC served as investment banker for the transaction.
About The Paper Store:
The Paper Store, LLC, based in Acton, Massachusetts, is a leading specialty gift retailer with 86 stores located in the northeastern United States. Since its inception, the Company’s mission has been to help their customers find unique gifts to celebrate all of life’s occasions from humorous to heartfelt. The Company also believes in maintaining strong, local ties to the community thru various charitable endeavors. For more information, please visit https://www.thepaperstore.com.
About G2 Capital Advisors
G2 Capital Advisors provides M&A, capital markets and restructuring advisory services to the middle market. We offer integrated, multi-product and sector-focused services by pairing highly experienced C-level executives with specialist investment bankers. We aspire to be the trusted advisor of choice to our clients including corporations and institutional investors. For more information, please visit www.g2cap.com
Securities offered through Hollister Associates, LLC. Member FINRA, SIPC. G2 Capital Advisors, LLC and Hollister Associates, LLC are separate and unaffiliated entities.
G2 Capital Advisors CONTACTS ON THIS Transaction:
Jeffrey Unger, CEO:
E: [email protected]
Don Van der Wiel, Managing Director, Restructuring:
E: [email protected]
Konstantin A. Danilov: Vice President, Restructuring:
E: [email protected]
Matt Powers: Associate, Restructuring:
E: [email protected]
PRESS PLAY : G2 Capital Advisors was designed for challenging and uncertain markets. With our deeply operational team of former executives we assist clients to maximize long-term value. Providing financial advisory services including Restructuring, Capital Markets and M&A Support.
PRESS PLAY : Did you know G2 has a curated bench of over 150 industry focused interim resources? We have Interim CFO, CEO, COO, CRO’S and we are ready to help you find the resource you need! Subscribe for real-time updates, and our team will reach out ASAP!
CLIENT:
BeavEx Incorporated (“BeavEx” or the “Company”) based in Atlanta, Georgia, is a provider of time-critical, same-day transportation and logistics services to businesses throughout the United States. The Company facilitates the delivery of mission-critical packages for retail/distribution, clinical lab/pharmaceutical, critical parts, and financial services customers with a network that provides same-day access to more than 77% of the U.S. population. The Company also operates Guardian Medical Logistics, a lab specimen logistics provider based in St. Louis, Missouri.
SITUATION:
In spring 2018, following liquidity and operational challenges, BeavEx sought additional management and strategic support and engaged G2 Capital Advisors (“G2”) to provide various advisory services.
ENGAGEMENT:
G2 served as the Chief Restructuring Officer of the Company, developing and executing restructuring initiatives as interim management and managing liquidity on a day to day basis. In the fall of 2018, G2 was engaged to serve as the exclusive sell-side advisor to BeavEx, leading a robust, highly tailored sale process.
OUTCOME:
G2 launched a robust sales process resulting in the signing of a stalking horse asset purchase agreement with TFI International (“TFI”) in February 2019. On February 18, 2019 BeavEx filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. G2 initiated a competitive bidding process under Section 363 of the Bankruptcy Code designed to achieve the highest or otherwise best offer, or offers, for the Company’s assets. Following an extensive examination of strategic alternatives and a robust marketing process, the transaction was successfully completed with a sale of the majority of the Company’s assets to TFI, and the acquisition of BeavEx accounts receivable, by Tiger Capital Group LLC in April 2019.
“The recapitalization was a very positive development for the Company, business partners, employees and customers” said Ben Wright, COO at G2. “With a strengthened position and the partnership with TFI, we expect BeavEx to be well equipped to take full advantage of the depth of its operations.”
About BeavEx (www.beavex.com)
BeavEx Incorporated is a leading provider of time-critical, same-day transportation and logistics services to business throughout the United States, operating 24 hours-a-day, 7 days-a-week, 365 days-a-year. The Company offers cross-docking and distribution, mail room operations, warehousing, storage, and product fulfillment services.
About G2 Capital Advisors (www.g2cap.com)
G2 Capital Advisors provides M&A, capital markets and restructuring advisory services to the middle market. We offer integrated, multi-product and sector-focused services by pairing highly experienced C-level executives with specialist investment bankers. We aspire to be the trusted advisor of choice to our clients including corporations and institutional investors.
CONTACTS ON THIS DEAL:
Ben Wright, COO: T: 415.800.1258 E: [email protected]
Ron Lentz, Managing Director: T: 630.362.8317 E: [email protected]
Don Van der Wiel, Managing Director: T: 317.417.2746 E: [email protected]
Peter Reed, Vice President: T: 617.366.9254 E: [email protected]
Connor Grogan, Senior Associate: T: 617.918.7973 E: [email protected]
Aaron Keyes, Associate: T: 317.506.6624 E: [email protected]
The M&A Advisor announced the winners of the 13th Annual Turnaround Awards on Thursday, December 20th. G2 Capital Advisors was named a winner for the Distressed M&A Deal of the Year (Category: Transactions over $100MM to $250MM) for the Restructuring and Recapitalization of LEGACY Supply Chain Holdings, Inc.
“Since 2002, we have been honoring the leading turnaround transactions, companies and dealmakers. G2 Capital Advisors was chosen from over 275 participating companies to receive the award. It gives us a great pleasure to recognize G2 Capital Advisors and bestow upon them our highest honor for distressed investing and reorganization firms and professionals,” said Roger Aguinaldo, Founder, The M&A Advisor. “G2 Capital Advisors represents the best of the distressed investing and reorganization industry in 2018 and earned these honors by standing out in a group of very impressive candidates.”
“We are thrilled the successful outcome for this multi-year effort with the team at Legacy and its stakeholders,” said Jeffrey Unger, CEO at G2. “This is a terrific example of the G2 special situations value proposition of financial, operational restructuring and an M&A capability.”
The Awards Gala is a feature of the 2019 Distressed Investing Summit. The Summit will take place on March 27/28 and will feature 250 of the industry’s leading professionals participating in exclusive interactive forums led by a faculty of restructuring industry stalwarts and business media experts. Palm Beach’s exclusive Colony Hotel will be home to the One-on-One Meetings, Opening Night Reception, Symposium, Awards Celebrations, and our infamous Closing Party. For an event profile CLICK HERE.
G2 professionals on this deal include, among others:
Matt Konkle, Senior Managing Director, Head of Industry Teams
Victoria Arrigoni, Managing Director, Industrials & Manufacturing
Ron Lentz, Managing Director, Transportation & Logistics
Jim Wiesen, Managing Director, Restructuring
Tom Gujda, Principal, Restructuring
Emily Murphy, Associate, Industrials & Manufacturing
About G2 Capital Advisors
G2 Capital Advisors provides M&A, capital markets and restructuring advisory services to the middle market. We offer integrated, multi-product and sector-focused services by pairing highly experienced C-level executives with specialist investment bankers. We aspire to be the trusted advisor of choice to our clients including corporations and institutional investors.
Securities offered through Western International Securities. Member FINRA, SIPC. G2 Securities and Western International Securities are separate and unaffiliated entities. This does not constitute an offer to buy or sell securities.
The M&A Advisor
Now in its 20th year, The M&A Advisor was founded to offer insights and intelligence on mergers and acquisitions, establishing the industry’s leading media outlet in 1998. Today, the firm is recognized as the world’s premier leadership organization for mergers & acquisition, restructuring and corporate finance professionals, delivering a range of integrated services.
G2 Capital Advisors announced today that Konstantin Danilov has joined the Boston office as Senior Associate. Konstantin will focus his time assisting G2’s special situation and restructuring clients overcome liquidity, financial, operational, or market challenges.
Prior to joining G2, Konstantin was a Manager at Analysis Group, one of the largest private economics consulting firms globally, where he specialized in financial analysis related to bankruptcy, reorganization, and related matters. He has experience with matters involving multiple approaches to valuation, complicated corporate structures and accounting issues in some of the largest, most complex bankruptcies in history, including Lehman Brothers, ResCap, General Motors, Polaroid, Paragon Offshore and others. Prior to joining Analysis Group, he was a senior investment analyst at Manulife Financial, where he helped oversee the implementation of liability-driven investment strategies and pension plan restructuring initiatives.
Konstantin is currently a member of the editorial board at the Association of Insolvency and Restructuring Advisors Journal and is a member of the investment advisory board at Independence Financial Partners. Konstantin holds a Master of Science in Management/Master of Business Administration double-degree from the MIT Sloan School of Management and HEC Paris. Mr. Danilov received the MIT Sloan Outstanding Thesis Award for his thesis titled “Corporate Bankruptcy: Assessment, Analysis, and Prediction” and was also the recipient of the HEC Paris Academic Award. He holds the Chartered Financial Analyst (CFA) designation and is a member of the CFA Institute. He has published articles in various outlets, including the Wall Street Journal, the Association of Insolvency and Restructuring Advisors (AIRA) Journal, the Journal of Corporate Renewal, the Journal of Investment Management, Law360, and others.
G2 Announced today that Pat Reinhardt has joined the team as Managing Director of G2’s Restructuring Group specializing in operational and financial restructuring. Pat will be based in the Boston office and brings more than 25 years of experience guiding financial turnarounds, joint venture negotiations, mergers/acquisitions and commercial real estate financing. She has experience in a wide range of industries, including education, travel, luxury textiles, furniture manufacturing and retail, government consulting and real estate finance and construction.
Over the last 13 years, Pat ran her own restructuring firm called Reinhardt Lippincott & Co., LLC where she focused on both financial and operational restructurings of lower middle market companies primarily in New England. Pat has sat on numerous boards including ELM Electrical, Package Machinery, and KLD Research & Analytics among others. Prior to starting Reinhardt Lippincott & Co., LLC, Pat served as a MD at DRS Capital, LLC., a private equity fund, CEO of Digi-Block Inc., an educational products company, and President of BOTEC Analysis Corporation, a firm that provides economic analysis of public policy issues.
“We are thrilled to have Patricia join G2, she brings deep restructuring and advisory experience and a passion for helping her clients revitalize their businesses,” said Jeffrey Unger, CEO of G2.
Pat lives in Wayland, MA and holds a Master’s degree in Public Administration from the John F. Kennedy School of Government at Harvard University and a Bachelor’s degree in Economics from the University of Mary Washington.
Our secret sauce is in our business model. G2 is unique as the first lower middle market Investment Bank to take former C-Level operating executives and leverage them as industry bankers and practice leaders. Each industry practice area is focused on developing unique and bespoke solutions that meet the long term strategic needs of companies. Whether we are raising capital, developing an M&A strategy, or assisting a distressed company, our Practice Leaders set the vision and lead each mandate.
We focus on a carefully chosen set of industries where our operating experience and capabilities can be leveraged to develop long term value creation strategies for our clients. Our industry practice groups include: Transportation & Logistics, Technology & Business Service and Industrials & Manufacturing.
G2 Capital Advisors is proud to announce the continued expansion of its team with the addition of Nate McOmber, who joins the firm’s Restructuring and Revitalization Practice as Director of Restructuring based out of G2’s San Francisco office. Nate brings two decades of experience in financial, strategic, and operational roles across multiple industries, as well as a strong network in the Technology and Business Services sector in the San Francisco Bay Area.
“Nate brings deep technical expertise paired with an operational background that will help our clients navigate complex restructuring dynamics. His strong background supporting early stage technology companies in a financial advisory capacity will enable G2 to expand our focus in the sector, providing restructuring services in conjunction with our investment banking offering,” said Ben Wright, Chief Operating Officer at G2.
The Palo Alto native previously served as Senior Vice President for Sherwood Partners where he led dozens of special situation advisory engagements in the early-stage Technology and Business Services space including out-of-court workouts, insolvency proceedings, corporate wind-downs, loan renegotiations, assignments for the benefit of creditors, and asset sale transactions. Nate is recognized for his expertise in implementing comprehensive solutions for troubled companies. Prior to Sherwood Partners Nate held leadership roles within venture-backed cleantech and specialty chemicals companies.
“Nate coming to G2 is the next step in our continued strategic investment in the breadth and depth of our financial advisory team. We’re excited to expand our capabilities to support additional clients in the early stage technology space,” said Jeffrey Unger, Chairman & CEO at G2.
Since February, G2 has added three additional new team members to its Restructuring & Revitalization Practice. Ryan Wittman, Vice President joined the firm after serving as Senior Manager for PerkinElmer, leading the financial team for their services division in the Americas, and acquisitions and divestitures on their Corporate Development team. Prior to PerkinElmer, Ryan was with Brook Venture Partners, a private equity firm focused on the tech–enabled services industry where he led new deal execution and provided CFO services to portfolio companies. In addition, Matt Powers, joined G2 as an Associate from Textron Inc in early February, and most recently Evan Carlson, joined as an Analyst from General Electric where he served as Corporate Development Associate.
G2’s team growth highlights the firm’s commitment to providing clients unparalleled guidance and the critical support they need to navigate complex markets and operational dynamics faced so far in 2020 with COVID-19. With a significant increase in activity firmwide, these key hires bring unique operational, financial, and transactional experience to support financial restructurings, operational turnarounds, and special situations investment banking engagements.
G2 continues to look for exceptional talent to join our expanding team and encourages reaching out to VP of Talent, Amy McCormack regarding interest in learning more about G2’s current openings.