Quantum Foods LLC, a leading independent custom provider of value-added proteins, announced that it is in the final stages of negotiating a sale of substantially all its business to CTI Foods Holding Co. LLC (CTI Foods).
After evaluating multiple opportunities in the process, a leader emerged with a clear strategy to move Quantum Foods past its financial challenges and onto a path for future success. CTI Foods, with seven existing manufacturing facilities in the United States, would provide a strong infrastructure for Quantum going forward.
“As an industry leading protein processor, Quantum’s well-established and long-standing customer relationships, diverse product offerings and demonstrated focus on quality and safety are recognized as significant value to buyers,” said Edward B. Bleka, chief executive officer, founder and sole owner of Quantum Foods.
“With enhanced financial backing, Quantum expects to fully deliver on its historic commitment to fulfilling the needs of our customers efficiently, safely and always with superior quality and service. We believe the completion of the sale process will enable us to focus effectively on caring for our customers, vendor partners and employees, who have all been incredibly supportive to the company,” Bleka added.
To facilitate the expected sale transaction, Quantum Foods has determined it is best to execute this sales process under the protection of the United States Bankruptcy Code. Quantum Foods today filed a voluntary Chapter 11 petition in the District of Delaware to obtain the essential financing necessary to preserve continuity, to the greatest extent possible, for its customers, employees and business partners. To this end, the company has secured a commitment for $60 million in debtor-in-possession (DIP) financing from its current lending group led by Crystal Financial LLC to fund its ongoing operations and fully expects to operate its overall business as usual by continuing to provide customers with safe and high quality protein products throughout this process.
In conjunction with the filing, Quantum Foods filed First-Day Motions with the Court to ensure the timely payment of employee wages and benefits, maintain its customers’ promotional programs and complete a smooth transition into operating under the protections of Chapter 11. The company expects to continue purchasing goods and services from its suppliers and to pay suppliers in the normal course for all goods and services delivered on or after today’s filings, while claims for goods and services delivered prior to the filings will be addressed as a part of the Chapter 11 process.
As part of the planned sale process through Chapter 11, the company will solicit additional competing offers for Quantum Foods to ensure it achieves the highest and best offer for its business.
Quantum Foods is being advised in its restructuring by Winston & Strawn, City Capital Advisors LLC and FTI Consulting Inc.