Spirit Pharmaceuticals, LLC (“Spirit” or the “Company”) is a leading contract packaging and concept-to-shelf solutions provider of private-label OTC pharmaceuticals and nutraceuticals, primarily serving a customer base encompassing the nation’s leading retail and pharmacy chains. The Company operates out of a ~115,000 square foot facility in New York which was expanded in 2022 to increase production capacity and create operational efficiencies.
After realizing tremendous year-over-year growth in the wake of the pandemic, the Company found itself significantly over-levered and in default with its senior lender. A failed attempt to refinance its outstanding debt with an alternative lender resulted in the senior lender freezing the Company’s line of credit, thus hindering its ability to purchase inventory and fulfill customer orders. The Company entered into a forbearance agreement with its senior lender who partially reopened the line of credit and appointed a chief restructuring officer to operate the Company.
SC&H Capital was retained to conduct an expedited, extensive marketing process in search of a buyer for the Company’s assets. Despite having no reliable financial statements, ongoing litigation, customer and supplier concentration, and limited liquidity, SC&H Capital was able to position the Company as a suitable going-concern investment with over 100 interested parties executing an NDA for the opportunity.
Ultimately, SC&H conducted a competitive auction for the assets with four qualified bidders. After 14 rounds of bidding, a strategic buyer, Prodose, backed by a Singaporean private equity firm purchased the assets via an Article 9 sale and rehired the majority of the employees.
