CHICAGO, March, 2009 – City Capital Advisors, LLC, a middle market investment and merchant bank, is pleased to announce the sale of a majority of the assets of United Fixtures Interlake (“UFI”) to the U.S. and Mexican subsidiaries of publicly traded Mecalux S.A. (“Mecalux”), based in Barcelona Spain, pursuant to section 363 of the U.S. Bankruptcy Code.
UFI, a privately held company based in Naperville, Illinois, and the leading North American producer of heavy-duty steel storage rack and order fulfillment systems, retained City Capital last November to serve as its exclusive financial advisor and selling agent. City Capital conducted an expedited global marketing process in response to UFI’s increasing liquidity constraints brought on by rapidly deteriorating market conditions and a sudden reduction in steel prices. By December, with the Company facing almost certain liquidation, City Capital negotiated an asset purchase agreement (“APA”) with Mecalux, one of the leading international producers of automated and static storage and inventory logistics systems that had previously been interested in acquiring UFI for strategic reasons. UFI immediately thereafter filed for bankruptcy protection, with Mecalux as the “stalking horse bidder.” The APA was novel because it excluded all accounts receivable from the assets being purchased in order to reduce the buyer’s cash outlay but still allow UFI’s creditors to recover full value for UFI’s assets as the accounts receivable were ultimately collected. After the APA was signed, City Capital continued its global marketing process, with numerous other strategic buyers showing strong interest.
Ultimately, none could top Mecalux’s bid, and UFI sold the majority of its assets to Mecalux in March. City Capital also advised UFI to incorporate a small non-rack division and hold it outside the bankruptcy process, so it could be sold for its going concern value, again in an effort to maximize total returns for UFI’s creditors. “City Capital is very pleased to have worked with UFI on this important transaction,” said Scott Lang, City Capital Managing Director. “Hundreds of jobs have been saved and UFI’s senior secured creditors will recover almost the full amount of their loans. UFI has built an incredible reputation for superior product quality and customer service over the years, and Mecalux represents an ideal strategic buyer with expertise and resources to build upon UFI’s strong reputation and leading market position.”
About City Capital Advisors
City Capital is a results-driven middle market investment and merchant bank. Client engagements are managed exclusively by senior professionals, each with at least 20 years of highly successful deal making experience. Typical transaction values range from $50 million to $500 million. Advisory capabilities include mergers and acquisitions, leveraged recapitalizations, private capital formation for growth/acquisition/ownership transition, and financial restructurings. Longstanding relationships with strategic buyers and financial investors with interests across a wide variety of industries and geographies enables City Capital to offer its clients unique and proprietary execution capabilities on a global basis. Since becoming a FINRA registered broker-dealer in 2007, City Capital has successfully advised on transactions totaling in excess of $1.5 billion.