Associated Materials’ Recapitalization Agreements

Schulte Roth & Zabel, Morrison & Foerster and Paul, Weiss advised certain noteholders of Associated Materials Inc. on the deal. Kirkland & Ellis LLP served as the Associated Materials’ legal counsel.

Associated Materials Inc., a leading manufacturer and distributor of exterior building products with over $1.3 billion in annual sales, completed a series of recapitalization transactions that will significantly delever its balance sheet and enhance its liquidity position.

Under the terms of the transactions, a group of investment funds, including certain funds and managed accounts of Oak Hill Advisors, holding over 99% of the company’s $675 million 9.00% senior secured notes due 2024 will convert those holdings into substantially all of the common equity securities of the company. The company’s convertible preferred equity will be cancelled in exchange for a portion of its new common equity. Associated Materials will also issue $250 million of new debt, the proceeds of which will be used primarily to provide liquidity on its balance sheet. The recapitalization agreement and related transactions, which are subject to customary closing conditions, are expected to close before the end of August 2020.

The Paul, Weiss team included restructuring partners Jacob Adlerstein and Andrew Rosenberg (Picture); tax partner Robert Holo; corporate partners Ted Ackerman and Lawrence Wee and counsel Nathan Sawyer; employee benefits partner Andrew Gaines; and antitrust counsel Marta Kelly.

Schulte advised Oak Hill Advisors on all aspects of the recapitalization transactions with a team led by business reorganization partner Kristine Manoukian and M&A and securities partner F. Xavier Kowalski. The team also included M&A and securities partner Andrew Fadale and associate William Tevlin; employment & employee benefits partner Ian Levin and associate Adam Gartner; tax partner Dan Kusnetz and associate Joseph Reich; finance of counsel Ronald Risdon; and business reorganization associate Kelly (Bucky) Knight.

Involved fees earner: Edward Ackerman – Paul Weiss Rifkind Wharton & Garrison; Jacob Adlerstein – Paul Weiss Rifkind Wharton & Garrison; Andrew Gaines – Paul Weiss Rifkind Wharton & Garrison; Marta Kelly – Paul Weiss Rifkind Wharton & Garrison; Andrew Rosenberg – Paul Weiss Rifkind Wharton & Garrison; Nathan Sawyer – Paul Weiss Rifkind Wharton & Garrison; Lawrence Wee – Paul Weiss Rifkind Wharton & Garrison; Andrew Fadale – Schulte Roth & Zabel; Adam Gartner – Schulte Roth & Zabel; Kelly Knight – Schulte Roth & Zabel; Xavier Kowalski – Schulte Roth & Zabel; Dan Kusnetz – Schulte Roth & Zabel; Ian Levin – Schulte Roth & Zabel; Kristine Manoukian – Schulte Roth & Zabel; Joseph Reich – Schulte Roth & Zabel; Ronald Risdon – Schulte Roth & Zabel; William Tevlin – Schulte Roth & Zabel; Robert Holo – Simpson Thacher & Bartlett;

Law Firms: Paul Weiss Rifkind Wharton & Garrison; Schulte Roth & Zabel; Simpson Thacher & Bartlett;

Clients: Associated Materials, LLC – Noteholders; Oak Hill Advisors L.P.;

Author: Ambrogio Visconti