Monitronics International Inc. has successfully emerged from Chapter 11 protection and has merged with Ascent Capital Group Inc., marking the completion of the company’s financial recapitalization. As a result of the financial recapitalization, Monitronics’ largest shareholders will be EQT Credit, the credit arm of EQT Partners, a global investment firm with around EUR 40 billion in assets under management, and Brigade Capital Management, a global investment management firm.
“This is an exciting day for Monitronics as we have emerged as a stronger, more focused organization,” said Jeffery Gardner, president and CEO of Monitronics. “With renewed balance sheet strength, a strong subscriber portfolio and recurring revenue base, and the support of EQT and Brigade, two highly regarded financial sponsors, we are well positioned to be a leader in the accelerating home security market and to execute on the vast growth opportunities ahead. I want to thank our dedicated team of employees as well as our dealers, customers and suppliers, who continued to believe in our company and worked with us to achieve this successful balance sheet recapitalization.”
Stephen Escudier, partner at EQT Partners and investment advisor to EQT Credit, said, “We are pleased to have worked collaboratively with the company and its stakeholders to facilitate a balance sheet recapitalization that optimally positions Monitronics for success. As Monitronics’ largest shareholder, we look forward to partnering with the company’s management team as they execute on their strategic vision and continue to build Monitronics’ position as an industry leader. In partnership with our fellow shareholders, we have recruited an experienced and high caliber board of directors of senior industrialists to support management in their efforts to drive value in the coming years.”
Monitronics emerged from Chapter 11 protection having eliminated approximately $885 million of debt, including approximately $585 million aggregate principal amount of the company’s 9.125 percent Senior Notes due 2020, $250 million of the company’s term loans and $50 million of the company’s revolving loans. Approximately 14 percent of the company’s 9.125 percent Senior Notes due 2020 received cash and the remainder, along with $100 million of the company’s term loans, were converted into equity. Approximately $823 million of the company’s term loans were converted into a new term loan facility. Upon emergence, the company also gained access to $295 million of additional liquidity under new exit financing (consisting of a $150 million term loan facility, and a $145 million revolving facility) to support its continued growth and ensure it can continue to execute on its strategic plan.
In tandem with the completion of Monitronics’ restructuring, the company has appointed a new board of directors that will provide critical expertise and experience as the company enters its next phase of growth and innovation.
Effective immediately, the new Monitronics board of directors will be: Jeffery Gardner, Monitronics president and CEO; Michael J. Kneeland, chairman of the board, who most recently served as the CEO of United Rentals Inc. and currently serves as the non-executive chairman of United Rental’s board; Stephen Escudier, who currently serves as a partner at EQT Partners; Andrew Konopelski, who currently serves as a partner at EQT Partners and head of EQT Credit; Michael Meyers, who most recently served as CFO of Monitronics; Mitchell G. Etess, who most recently served as the CEO of Mohegan Gaming Authority & Entertainment; and Patrick J. Bartels Jr., who currently serves as the managing member of Redan Advisors LLC and holds the chartered financial analyst designation.
“The experience and engagement of our new board of directors — combined with the continued loyalty and partnership of our customers, employees, suppliers and independent authorized dealers — will ensure we are in a position to capitalize on the opportunities in front of us and continue to build on our position as an industry leader,” Gardner said.
Monitronics was represented in the recapitalization by Latham & Watkins LLP, King & Spalding LLP, Hunton Andrews Kurth LLP, Moelis & Company LLC and FTI Consulting Inc. Ascent was represented in this matter by Baker Botts LLP and B. Riley FBR Inc.
