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March 14, 2019 – The Court hearing the BeavEx Holding Corporation case issued an order [Docket No. 151] authorizing (i) the Debtors’ proposed bidding procedures in respect of a potential section 363 asset sale, (ii) bid protections for stalking horse bidder TForce and (iii) an auction schedule. The Debtors have entered into an asset purchase agreement with TForce Final Mile, LLC, TForce Final Mile West, LLC and TForce Logistics, LLC (collectively, “TForce” or the “Lead Bidder”) pursuant to which TForce has proposed to purchase the Debtors’ assets for $7.2mn.
As previously cited from the Debtors' bidding procedured motion [Docket No. 16], “In September 2018, the Debtors, in consultation with their legal and financial advisors, began exploring several potential transactions through which to sell all or substantial parts of their business. To that end, the Debtors engaged G2 Capital Advisors (‘G2’) to conduct an extensive and comprehensive marketing process. The Debtors, through G2, conducted a targeted solicitation by reaching out to approximately fifty-seven (57) potential acquiring parties, distributing an executive summary to twenty-four (24) of those parties who expressed an interest in acquiring all or a portion of the Debtors’ assets…. As a result of the marketing efforts, the Debtors received nine (9) indications of interest. The Debtors determined that seven (7) of those indications of interests fairly reflected the Debtors’ valuation and should be advanced to the next stage of the marketing process which included on-site meetings with the Debtors. The Debtors ultimately received four (4) written letters of interest (‘LOIs’) for the purchase of some or substantially all of their assets, one of which included the LOI from the Lead Bidder.
After evaluating the LOI’s, the Debtors, in consultation with their legal and financial advisors, determined that a sale of all or substantially all of their assets, was the best way to maximize the value of their estates for their creditors and other parties in interest. On February 14, 2019, BeavEx Incorporated, JNJW Enterprises, Inc. and USXP, LLC (the ‘Seller’) entered into the APA with the Lead Bidder for the sale of the Assets. The APA evidences a value-maximizing bid of cash in the approximate amount of $7.2 million, plus assumption of certain liabilities. The APA preserves the Debtors’ business as a going concern.”
Key terms of the TForce APA:
- Purchase Price: Cash of $7,204,987 plus assumption of the certain assumed liabilities; and any other consideration provided under the APA.
- Bid Protections: A break-up fee in an amount equal to $180k and reimbursement of up to $150k of expenses.
Key terms of the Bidding Procedures:
- Diligence: The Debtors will afford any Qualified Bidder such due diligence access or additional information as the Debtors, in consultation with their advisors, the prepetition secured lender and proposed postpetition secured lender and any statutorily appointed committee (if any), deem appropriate, in their reasonable discretion, subject to contractual obligations to limit access to certain proprietary information; provided, however, the Debtors will, in their reasonable discretion, make reasonable commercial efforts to provide Qualified Bidders with the same information provided to the Lead Bidder.
- Qualified Bidder: A bid submitted will be considered a Qualified Bid only if the bid is submitted by a Qualified Bidder (a “Qualified Bid”). Qualified Bids, if for the same assets covered by the TForce APA must exceed the TForce bid by at least $430k, which represents the sum of (i) $180k break-up fee, plus (ii) the the reimbursement of the TForce’s expenses (not to exceed $150k), plus (iii) $100k. Any further bids will have to be made in increments of $100k.
- Bid Deadline: April 8, 2019
- Sale Objection Deadline: April 9, 2019
- Deadline to Notify Qualified Bidders: April 9, 2019
- Auction (if required): April 10, 2019
- Notice of Successful Bidder: April 11, 2019
- Sale Reply Deadline: April 12, 2019
- Sale Hearing: April 16, 2019
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