Catalina Marketing Corp., one of the largest companies in St. Petersburg, has filed a voluntary Chapter 11 petition for bankruptcy.
The company, which provides digital marketing for the consumer packaged goods industry, has an agreement with most of its lenders to restructure its balance sheet, a news release said. The company also has a commitment for $125 million in debtor-in-possession financing that will support operations during the restructuring, subject to court approval, and $40 million in exit financing to support operations after the restructuring.
“After carefully evaluating our options, we determined that a court-supervised restructuring is the best way to strengthen our financial position for the long term. Through this process, we expect to reduce the company’s debt by more than 75 percent, giving Catalina a stronger financial foundation,” Jerry Sokol, president and CEO, said in the news release.
Catalina expects operations to continue as usual through the bankruptcy process, including paying workers. The company, with its headquarters at Carillon Office Park, has between 500 and 1,000 workers in St. Petersburg, according to the city
It also has a big data analytics operations at that site.
Retailers will continue to honor digital and print coupons provided by Catalina, the company said. Operations outside the United States are not included in the bankruptcy proceedings.
Catalina, founded in 1983 and owned since 2014 by private equity firm Berkshire Partners, has evolved significantly since its early days when its technology was used to print coupons for customers checking out at the grocery or drug store. The company has expanded into digital products and services, but growth in that area has not been fast enough to offset a material decline in in-store promotional spend by Catalina’s US Established Brands market, Moody’s Investors Corp. wrote in an April report.
Both Moody’s and S&P Global Ratings downgraded the credit rating for Checkout Holding Corp., Catalina’s parent company, earlier this year, warning the company faced a liquidity crunch.
Catalina has between 1,000 and 5,000 creditors, the bankruptcy petition said. Assets and liabilities are each in a range of between $1 billion and $10 billion.
The largest unsecured creditor is Crescent Mezzanine Partners, a New York firm with an unsecured claim of $200 million.
There also are a couple of local firms among the list of 30 largest unsecured creditors: Advanced Systems in Clearwater, with a claim of $240,648, and Veredus Corp. in Tampa, with a claim of $147,457.
Several former employees also are owed severance, including Andy Heyman, former CEO, and Todd Morris, former president of Catalina US. Heyman is owed $680,770 and Morris is owed $499,359.
Weil Gotshal & Manges is serving as legal counsel, Centerview Partners is serving as financial advisor and FTI Consulting is serving as restructuring advisor to Catalina.