Mood Media Quickly Out Of Chapter 11; Looking To BUY Other Companies???
October 7, 2020 by Dave Haynes
I wrote back in July about Mood Media heading into the Chapter 11 Bankruptcy process, and kinda thought, well that’s the end of that.
Wrong.
The company went in and out of that process quickly and is now actively saying it is looking to BUY other companies. Bubbles form on my lips when I read financial filings, so don’t look for any help from me decoding this:
Mood Media has emerged from Chapter 11 with $240M in exit term loans.
In-store music provider Mood Media Corp.’s bankruptcy reorganization included a $200 million exit term loan facility and $40 million in new-money term loans.
HPS Investment Partners is the administrative agent. HPS was agent under a pre-petition first-lien credit agreement. The $40 million in new money includes a roll of the debtor-in-possession facility.
Interest on the exit term loans due 2025 is L+725 points (L+925 pay-in-kind) with a 1% London interbank offered rate floor. The loan includes a 3% closing payment and 3% exit fee. Default interest is an additional 2%. The loan is non-callable in the first year, and features a prepayment premium of 3% in year two, dropping to 1% in year three, court documents show.
The loan features a leverage covenant, subject to a cap at $30 million.
The company filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas, Houston, on July 30 with a prepackaged bankruptcy plan. A judge confirmed a reorganization plan the next day.
The company had earlier filed a proceeding in 2017 under the Canadian Business Corporations Act, or CBCA, to implement restructuring, and a parallel Chapter 15 in bankruptcy court in Manhattan. Mood Media was redomiciled to Delaware, from Canada, through the reorganization.
The latest restructuring agreement cut debt by $404 million.
So what I get from all that accounting Martian is that they have more money, in the form of loans.
Billboard Insider editor Dave Westburg has a post up on his site that quotes a Mood exec at length about its M&A plans.
Says Mood Media SVP Strategic Alliances Eric Sinoway:
Mood is aggressively pursuing a strategy to expand its product offerings, geographic reach, partnerships, and – of course – clients. With our financial restructuring complete, Mood is enjoying its most solid financial foundation in decades. With support from our owners, HPS Investment Partners, a bank with approximately $60 billion assets under management, Mood is uniquely positioned to grow through acquisitions. With our installation base of 500,000 locations in 100+ countries, Mood is poised to continue to lead the transformation of the out of home industry.We are pursuing the vision that our CEO David Hoodis announced earlier this year—Mood Reimagined—with a maniacal focus on becoming a more client-centric organization that provides meaningful value to retailers, hotels, restaurants, pharmacies, and other businesses. The right acquisitions can help us get there faster.
Hmmmm … one might argue they ought to get their existing business working before taking on more, but I have to assume the guys in suits at HPS aren’t knuckleheads who write big checks for giggles.
Hey Dave…How many times have these folks gone broke?