Apex Tool Group is completing an out-of-court restructuring where existing lenders will take control of the power saw maker, according to sources. Akin Gump and Perella Weinberg advised the lenders, according to sources, in a consensual deal where holders of 99% of the debt have agreed to the transaction.
The transaction, according to sources, entails the following:
- $150m of new money, including ~$120m new money from existing holders of A-2 tranche and an extra $30m pro rata share of senior lenders across the super priority in the As;
- A-2 tranche gets bulk of reorg equity, Bain retained residual stake
- Lenders that sign onto the deal and agree to fund their pro rata share of the senior or junior capital will roll at par into new facilities: $155m superpriority; $630m A-1; and $500m B tranches
Total debt stack will be $1.5bn.
The ultimate failure of the 2024 LME is mainly due to the unexpected impact of tariffs, according to sources, even though they turned out to be less acute than initially feared. There are provisions in the documents that account for a third party sale, noting that in order to facilitate a sale out of court, the debt can take a haircut so long as it’s done ratably.
Apex marked a watershed moment at the start of 2024, when it appeared sponsor Bain was attempting an aggressive non-pro rata liability management exercise with a capital structure that was not truly distressed in order to juice what would have been an otherwise lackluster ROI.
The deal eventually gained approval from more than 91% of first lien lenders to participate in a proposed exchange offer, after a rocky start with lenders threatening to challenge.
The 2024 transaction was executed by Kirkland & Ellis and PJT Partners for the company, and at the time involved $125m in new money as a super priority, as well as the tranche A and B loans that just rolled into new facilities of the same size.
Yet because of the tariffs and other factors this year, Apex’s business model became further strained, leading to a full change-of-control restructuring.
Apex and Bain did not respond to requests for comment by press time.
