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An affiliate of Staple Street Capital, private equity firm based in New York City, has acquired substantially all of the assets of Mid-States Supply Company, base in Kansas City.
Mid-States Supply a PVF distributor started more than 50 years ago, voluntarily entered into Chapter 11 bankruptcy restructuring on Feb. 7.
The transaction to buy the assets was through a “stalking horse bid.”
A Chapter 11 debtor that seeks to sell its assets must demonstrate to the bankruptcy court that it obtained maximum value for the subject assets. To accomplish that goal, the debtor will ask the bankruptcy court to approve a competitive auction process and related bidding procedures.The first step in that process typically entails the debtor’s execution of a binding “stalking horse” agreement with an initial purchaser against which higher and better offers can be solicited, and which spells out that the stalking horse will be deemed the “highest and best” bid if no competing proposals are received. By contrast, if competing bids are received, the stalking horse bidder may not prevail even if it is prepared to provide additional consideration to the estate at the auction.
“Staple Street Capital’s emphasis on providing value-added resources, commitment to operational excellence and continuous improvement, and conservative approach to financial leverage makes them a great partner for Mid-States,” said the distributor’s CEO Ben Hurst in the release. “These are the ingredients we need in a partner to grow and strengthen our position in the industry.”