CORRECTED-Educational products supplier School Specialty files for bankruptcy
(Corrects to insert dropped words "through grade 12" in first paragraph)
Jan 28 (Reuters) - School Specialty Inc, a provider of school supply and educational products to the pre-kindergarten through grade 12 market, filed for bankruptcy protection and said it will sell its assets to investment firm Bayside Capital Inc, an affiliate of HIG Capital.
The company, which was founded in 1959, said Bayside Capital has been appointed as the "stalking horse" or initial bidder for its assets, but they maybe be sold to a higher bidder in a court-supervised auction process.
School Specialty, which describes itself as one of the largest suppliers of supplemental educational products, supplies equipment and standards-based curriculums to the PreK-12 market.
That market, which the company said was worth $6 billion to $7 billion, is highly fragmented and subject to seasonality that results in a loss for the company for the last two quarters of the year.
In addition, the schools the company supplies are dependent on local and state level funding, which has taken a massive hit since the financial crisis.
The Greenville, Wisconsin-based company had revenue of $489 million for the first half of the fiscal year that ends in April 2013. It had fiscal 2012 revenue of $732 million.
School Specialty, which listed assets of $494.5 million and liabilities of $394.5 million as of Oct. 27, engaged Perella Weinberg Partners in October as its financial adviser to explore its options.
"We fully expect to continue normal business operations...", Chief Executive Michael Lavelle said.
The company said it would receive debtor-in-possession financing from Bayside Capital as it looks to work its way through bankruptcy.
The case is In re: School Specialty Inc, U.S. Bankruptcy Court, District of Delaware, No:13-10125. (Reporting by Tanya Agrawal in Bangalore)