Company says vendors and its employees will be paid in full during the process.
Jacksonville-based Acosta Inc. announced Friday it will file a prepackaged Chapter 11 bankruptcy reorganization plan, with a majority of creditors in agreement.
The sales and marketing company said the plan will be filed “in the coming weeks.” The plan provides for vendors to be paid in full during the Chapter 11 process and for all employees to receive their usual compensation.
“This process will enable us to continue to operate our business without disruption to clients, customers, employees, and business partners,” CEO Darian Pickett said in a news release.
Pickett, a 28-year veteran of the company, was promoted to chief executive officer in July.
The plan will eliminate $3 billion in debt by converting it into equity, and investors have committed $250 million in new equity capital.
As a private company, Acosta does not publicly disclose its finances. The company founded more than 90 years ago has more than 30,000 employees in the U.S., Canada and Europe.
Florida Trend magazine estimated its revenue at $2.3 billion in 2018.
The Carlyle Group, an international investment firm, acquired majority control of Acosta in 2014 for a price estimated at $4.8 billion.
The company said Friday it will be “significantly cash flow positive” after the restructuring.
“Through this strategic step, Acosta will be well-positioned, both operationally and financially, to make critical investments in our business and drive sales and market penetration for our clients and customers,” Pickett said.
“Our business remains fundamentally strong, and we are pleased that our new investors recognize the long-term value Acosta can create for our clients and customers.”
Acosta said 70% of lenders and 80% of noteholders have agreed on the restructuring plan. With creditor support, it expects to be able to complete the Chapter 11 process quickly.
Kirkland & Ellis is Acosta's legal counsel for the case. Davis Polk & Wardwell is acting as counsel for an ad hoc group of lenders, and White & Case and Sullivan & Cromwell are serving as counsel for certain supporting creditors.