Jan 28 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.
Shares of the company fell more than 76 percent to 14 cents
on Monday morning on the Nasdaq. Two years ago, the stock traded
at about $13.27 per share.
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
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
"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
The case is In re: School Specialty Inc, U.S. Bankruptcy
Court, District of Delaware, No:13-10125.