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MIDDLE MARKET COMPANY
TRANSACTION OF THE YEAR
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ADDISON MCKEE HOLDINGS LLC

Award small transaction of the yearAddison McKee Holdings,  is the leading global manufacturer of proprietary tube bending capital equipment and tooling. It was formed in 1995 through the merger of Addison Ltd and McKee Tooling Inc. In 2005, following a leveraged buyout, Addison McKee adopted an aggressive growth strategy that increased sales from $48 million in revenue in 2005 to $61.9 million in 2007. However, the growth sacrificed profitability.

Beginning in the fourth quarter of 2008, a dramatic downturn in orders resulted in annual year-over-year sales declining by 69%. Globally, the company endured significant cutbacks causing the closure of its Chinese and UK manufacturing operations. Total Employment decreased from 325 to 135.

In mid 2009 the Company’s faced liquidity issues which resulted in, Addison McKee’s equity sponsors and sub-debt holders infusing $1.4 million. This included a $500,000 bridge loan from Albion Investors LLC with warrants convertible into a majority of the equity in the event of default. However during the first quarter of 2010 it became apparent that Addison McKee would need a recapitalization plan including fresh equity in order for the Company to stave off bankruptcy.

In late February 2010, Albion Investors retained Robert Deprez (then with Pentwater Partners LLC) to conduct an on-site overall assessment of the Company’s financial position and operations. Albion and Pentwater evaluated the restructuring options, concluding that an out of court restructuring was the best option.

On March 23, 2010, Albion exercised its warrants taking a control position in the Company and appointed Robert Deprez (now currently of Deprez Leadership Inc.) as interim CEO. Don Rafferty of Cohen, Todd, Kite & Stanford, LLC was retained to support the transaction as outside counsel.. Together, the restructuring team designed a parallel operational turnaround and restructuring transaction which included a structural and financial overhaul of the Company’s operations. The out of court restructuring hinged on successfully settling with $4.84 million of unsecured creditors and refinancing the senior bank facility.

On May 1, 2010, suppliers and unsecured creditors were notified of the restructuring. These parties were offered 30% payment of outstanding claims. Negotiations were also held with minority sub-debt holders, and efforts were undertaken to adequately modify the in-place senior lending facility or secure a new facility. At completion of the restructuring, the Company enjoyed, among other things, an infusion of $3.5 million in new equity, voluntary settlements with over 92% of the unsecured creditors, settlement with the minority sub-debt holders, and a refinanced senior credit facility.

Addison McKee’s successful recapitalization and restructuring allowed it to maintain its competitive market position while saving approximately 150 jobs. It also provided the capital to restart manufacturing operations abroad. In 2011 Addison McKee’s is enjoying revenue growth in excess of 30% and increased operating margins In total, Addison McKee’s successful transaction was the result of the team’s joint efforts.


Robert Deprez is the founder and Managing Director of Deprez Leadership which provides transition and interim CEO services to middle market companies.  He is a recognized expert on interim management and developed the proprietary Deprez Leadership Transition Process which drives results with less risk and shorter implementation time.

He is also a certified Grief Specialist trained through the Grief Recovery Institute. As the CEO he leads companies with voids and instability at the CEO position.