Kaye Scholer represented Deutsche Bank Trust Company Americas, as administrative agent, and a group of lenders led by Eaton Vance, Credit Suisse, Invesco and Oppenheimer Funds in the restructuring of IAP Worldwide Services, Inc. and certain of its subsidiaries and affiliates. IAP's debt-for-equity out-of-court restructuring is the first of its kind for a defense contractor.
IAP provides global-scale facility management services, contingency support, technical services and other support services for the US military, other governmental agencies, humanitarian groups and numerous commercial enterprises. The company, previously owned by Cerberus, provided support for the U.S. Military during Operation Iraqi Freedom in Iraq and Operation Enduring Freedom in Afghanistan and currently operates in more than 120 locations across the globe.
IAP owed approximately $354 million to our clients, the first lien lenders, and owed its second lien lenders approximately $125 million. The restructuring involved the conversion of 80% of the existing first lien debt into all of the new equity of IAP, a buy-out of IAP's second lien debt, the creation of a new $50 million revolving loan and letter of credit facility and the amendment and restatement of the existing term loan facility.
Given the type of work performed by IAP for the US Government, as well as the significant ownership and management changes required by the restructuring, the lenders relied heavily on the experience of our National Security, Government Contracts & Regulatory Compliance Department in Washington DC, which was integral in getting the firm retained at the outset.
The engagement involved five of our offices and more than 45 Kaye Scholer lawyers. The team included Partners Michael Messersmith, Mark Liscio, Farhad Jalinous, Ron Henry, Alan Glantz, Steve Koval, Laurie Abramowitz and Jeff London, Counsels David Menchel, Karalyn Mildorf, David Hibey and Robert Wagman, Associates Katie Schmanski, Jonathan Agudelo, Roxanne Mintz, Jennifer Fernandez, Tiffany Graddick and Thomas Porrovecchio.
A copy of the company's press release announcing the completion of the restructuring is below.
IAP Worldwide Completes Balance Sheet Recapitalization
New Capital Structure Accelerates Future Growth and Investment
Cape Canaveral, FL., July 21, 2014 — IAP Worldwide Services, Inc. ("IAP") today announced the successful completion of its balance sheet recapitalization under the terms of the Restructuring Support Agreement announced on April 3, 2014.
The consensual transaction between the Company, its controlling shareholders and its first- and second-lien lenders involved the conversion of over 80 percent of the Company's debt into equity. Accordingly, IAP has significantly reduced its debt service requirements and improved its overall liquidity position. IAP also will maintain a $50 million revolving credit facility provided by the lenders for additional liquidity and access to letters of credit.
"IAP's underlying business is strong, fueled by our world-class talent, strong customer relationships and longstanding reputation as an industry leader that executes precisely under even the most difficult working conditions," said Spencer Wickham, President of IAP Worldwide. "Our enhanced capital structure will help accelerate our growth strategy, which focuses on maximizing opportunities to serve our core government customers."
"I am confident the successful restructuring announced today will right-size our debt structure and provide us with the liquidity required to invest in and grow our business as we strive to better serve our customers," Mr. Wickham continued. "We thank all of our employees for their relentless focus and exceptional service throughout this process. We also extend our gratitude to our new owners for their support throughout this effort and for their continued vote of confidence in our business. Today is a great day for everyone at IAP."
As part of the transaction, the incoming ownership group has formed IAP Global Services, LLC to be a holding company for IAP and appointed a new board who possess a long and successful track record in IAP's core U.S. government services market. The new Board includes Admiral (Ret.) William "Bud" Flanagan, Mr. Dean Popps, The Honorable Dr. John Hillen, Mr. Brett Lambert, Mr. Ed Bayone, and Mr. Christopher W. Parker. The board elected Admiral (Ret.) William "Bud" Flanagan Chairman.
Admiral (Ret.) William "Bud" Flanagan stated, "I am pleased to direct a great company with a proud history of service to the U.S. government and look forward to working with a strong board to maintain the confidence and long-term support of our customers, employees, and investors. IAP moves forward with a strong balance sheet, full investor support and a world-class board at its holding company to support IAP's management team in building on IAP's legacy of providing service excellence to the Departments of Defense, Energy, and State, as well as other U.S. government and allied customers such as NASA, NOAA, NATO, and the intelligence community."
About IAP Worldwide Services
IAP is a leading international contractor providing a broad spectrum of services and solutions to commercial industries, the U.S. and multi-national government agencies, and organizations. A world-class leader in providing seasoned program management, IAP leverages and integrates its capabilities to provide safe, innovative and reliable solutions to meet customers' diverse and complex challenges.
IAP's corporate headquarters is located in Cape Canaveral, Florida, and the Company operates in over 120 locations worldwide. The Company also maintains a corporate office in Panama City, Fla. For more information, visit IAP at www.iapws.com or www.youtube.com/user/IAPWorldwideServices.
Barbara Jerich, IAP
Kyna Legner, FTI Consulting
Also of Interest
- Maier Plans Emergency Response with Fort Meade and Fort Detrick Commanders October 20, 2016 • Client Successes
- IFLR1000 Recognizes Kaye Scholer’s Global Presence, Practices and Lawyers October 19, 2016 • Recognitions
- Kaye Scholer Clients Achieve Nearly Full Recovery in Arch Coal Chapter 11 Proceeding October 14, 2016 • Client Successes
- New LSTA Par/Near Par Delayed Compensation Regime August 31, 2016 • Client Alerts
- Following Five-Day Trial, Kaye Scholer Secures Win for Medicalgorithmics August 25, 2016 • Client Successes
- Primoff Named Best in Insolvency & Restructuring at Americas Women in Business Law Awards August 22, 2016 • Recognitions
- Best Lawyers 2017 Recognizes 41 Kaye Scholer Lawyers August 15, 2016 • Recognitions
- Summer Associates Successfully Assist Transgender Clients July 27, 2016 • Client Successes
- Maier Featured in Congressional Quarterly on CFIUS and Foreign Investment July 26, 2016 • Media Mentions