CBW is a full-line, full-service wholesale distributor serving retailers in the Mid-Atlantic region. As one of the top 20 convenience store wholesalers in the country, the Company offers a full line of over 10,000 items representing 95% of a convenience store’s needs. Headquartered in Mountville, Pennsylvania, the Company’s facility covers 100,000 square feet with almost 3,000,000 cubic feet of storage and 14 shipping and receiving docks. CBW has been in the wholesale distribution business since 1865 and has been family owned and operated for three generations.
Historically, the Company was a profitable operation. In May 2013, CBW learned that a customer located in Virginia was smuggling Virginia stamped cigarettes into New York. As part of an investigation by the federal government, a seizure warrant was issued against the Company’s primary operating bank account, putting a freeze on the account and leaving CBW unable to access funds for day-to-day operations. In reaction to the seizure warrant, the Company’s existing lender declared a default and immediately terminated the Company’s line of credit. After evaluating a number of strategic options to address the seizure warrant, CBW determined that the best alternative was to file for Chapter 11 to protect assets and provide time to reorganize and find a buyer for the business or secure financing.
SSG was retained as CBW’s investment banker to find a solution for the Company to exit bankruptcy, including a sale of substantially all of the Company’s assets or exit financing resulting in a plan of reorganization. SSG conducted a comprehensive marketing process which resulted in a wide range of potential buyers, including multiple strategic and financial parties interested in operating CBW as a going concern business. However, in November 2013, the Company settled the seizure warrant investigation with the federal government providing CBW the possibility to refinance existing debt and retain ownership of the business. SSG immediately commenced a financing process, resulting in multiple, competitive term sheets. The exit financing of $35 million enabled CBW to confirm a Plan of Reorganization that paid all creditors in full plus interest. SSG’s knowledge of the industry and flexibility in running concurrent sales and financing processes enabled the Company to continue as a going concern and maintain ownership for the family.