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SSG Client Transactions

Title

Blitz U.S.A., Inc.
Client Profile

Client Profile

Blitz U.S.A., Inc. (“Blitz” or the “Company’) was the industry leader in portable fuel containment, with product designs made specifically for containment of gas, kerosene, and diesel. From its inception as the supplier of the traditional, olive-drab jerry can to the U.S. military throughout World War II, Blitz and its predecessor companies evolved into the national leading producer of fuel containment products. Blitz’s main customers included auto specialty, mass merchant, and hardware/home retailers across the U.S.
Situation

Situation

Blitz grew to have more than 150 million units in circulation, which accounted for over 70% of the U.S. market share in portable fuel containment and storage. Historically, Blitz operated with minimal interruption from litigation. Over the past few years, however, Blitz experienced a significant increase in product liability litigation with approximately four to seven new cases filed each year. Initially, the Company successfully managed its litigation exposure and associated defense costs, but following a state jury verdict and several settlements with plaintiffs by Blitz’s insurance carriers, the Company experienced a dramatic increase in lawsuits. With an extremely high self-insured retention per occurrence, Blitz was forced to divert all net operating cash flows after debt service to fund insurance and defense costs. As a result, Blitz and five of its affiliates filed under Chapter 11 on November 9, 2011 in the U.S. Bankruptcy Court for the District of Delaware. Furthermore, Blitz’s commercial liability insurance coverage expired on July 31, 2012. Due to the uncertainty surrounding litigation against Blitz, its insurers were unwilling to extend coverage beyond expiration without significant letter of credit backing and the Company was forced to shut down operations at the end of July 2012.
Solution

Solution

SSG was retained as Blitz’s investment banker to explore a sale of substantially all of the Company’s assets. SSG conducted a comprehensive marketing process which resulted in a wide range of potential buyers, including multiple strategic and financial parties interested in operating Blitz as a going concern business. Scepter Holdings Inc., a Canadian strategic buyer, was chosen as the stalking horse bidder and ultimately presented the highest and best offer for substantially all of the assets of Blitz. SSG’s experience in running efficient and timely Chapter 11 sales processes and its knowledge of the market enabled key stakeholders to maximize the value of the assets while preserving the option to re-start the Company’s operations.
July 2012
has sold substantially all of its assets to
Under Section 363 of the U.S. Bankruptcy Code in the
U.S. Bankruptcy Court for the District of Delaware.
The undersigned acted as Investment Banker to
Blitz U.S.A., Inc. on this transaction.

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Call to learn more

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