Dive Brief:
- Balloon manufacturer Anagram International, which filed for bankruptcy in November, said Wednesday that it has exited Chapter 11 bankruptcy as an independent company. Party City, which owned Anagram and separately filed for bankruptcy about a year ago, exited Chapter 11 in October.
- Anagram sold itself to a group of its pre-bankruptcy investors, dubbed Celebration Bidco, which had earlier submitted a stalking horse bid. The group includes J.P. Morgan, Neuberger Berman Investment Advisers, Littlejohn & Co., and Barings.
- As part of the sale terms, Celebration Bidco will assume Anagram’s trade payables and all of the balloon company’s employees will be retained. Party City accounted for 38% of Anagram’s sales, the company said in court documents in November.
Dive Insight:
Anagram had been a wholly-owned subsidiary of Party City. However, that business wasn’t part of Party City’s Chapter 11 case. While in bankruptcy, Party City had moved to cancel its services, intellectual property licensing and supply agreements with Anagram.
Celebration Bidco’s purchase agreement includes $168.4 million toward paying down obligations, the assumption of assumed liabilities, a $1.5 million wind-down, and cash payment sufficient to satisfy outstanding obligations under the terms of the debtor-in-possession asset-based lending agreement. Anagram has renewed its contracts with Party City following the sale to Celebration Bidco, court documents filed last week show. Anagram will operate as an independent company going forward.
“I am grateful for the dedication and commitment of all of our employees as we navigated this process and for the continued support of our vendors and customers,” Anagram President Jim Plutt said in a statement. “As we embark on this fresh start with a stronger balance sheet and new capital, we are focused on further investing in our team and our industry-leading innovation in the years to come and delivering even greater value to our stakeholders.”
Anagram’s financial and business difficulties escalated in 2020, Chief Restructuring Officer Adrian Frankum said in court documents. The company’s challenges included unsustainable debt levels, the effects of the pandemic on celebrations and gatherings, global inflation and helium shortages — a critical product for a balloon business.
At the end of 2022, Frankum said 85% of Anagram’s products were designed as helium-filled foil balloons. At that time, the company’s adjusted EBITDA fell from about $52 million in 2021 to approximately $29 million in 2022.
When it filed for bankruptcy, Anagram reported about $240 million in debt obligations. At that time, the company employed about 350 people who worked in a vertically integrated business model supporting manufacturing, production and distribution services.
“We have long admired Anagram and its team as the company has continued to lead the foil balloon industry in innovation and quality for decades," Gentry Klein, managing director at Littlejohn & Co., said in a statement. “We are excited to partner with Jim and the Anagram team for this next chapter as an independent company and support them as they capitalize on new growth opportunities and expand their market position globally.”
Founded in 1977 and based in Eden Prarie, Minnesota, Anagram International says it is the world's largest foil balloon manufacturer. The company became a subsidiary of Party City through a series of acquisitions. Through a network of distribution partners that includes dollar stores and major retailers, the company says its balloons are sold in over 140 countries.
