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Summit bid procedures approved; Fortress, convertible noteholders agree to sale terms
By Caroline Salls
Pittsburgh, Feb. 15 - Summit Global Logistics Inc. obtained court approval of the bid procedures for the proposed sale of substantially all of its assets, according to a company news release.
TriDec Acquisition Co. Inc. is the stalking horse bidder, having agreed to pay $56.5 million plus liabilities for the company and its TUG USA and FMI International operating subsidiaries.
TriDec is a newly formed entity that is owned by some members of Summit Global management.
In addition, the company said it has agreed in principle with its convertible noteholders and Fortress Credit Corp. on the terms of the sale.
Under the agreement, Fortress will provide financing for the acquisition, and Fortress and the convertible noteholders will also have a minority interest in the acquiring entity.
According to the bid procedures motion, the proposed sale is the result of months of discussion and negotiations led by Summit's investment bank Gordian Group LLC. During those months, it was determined that outside buyers would not likely be willing to pay an amount equal to the amounts owing to senior secured creditors.
If TriDec is not the winning bidder, there is an expense reimbursement of up to $1.8 million.
Initial overbids must be for at least $250,000 more than the stalking horse bid.
Subsequent bids at auction must be made in increments of at least $100,000.
Bids are due by 5 p.m. ET on March 11.
The auction will be held on March 13, and the sale hearing is scheduled for March 18.
Based in Kenilworth, N.J., Summit provides supply chain management services in the United States, Asia, Russia the Commonwealth of Independent States, the Eastern Mediterranean, the Middle East and India. The company filed for bankruptcy on Jan. 30. Its Chapter 11 case number is 08-11566.
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