Gibson Brands announced that between March 15 and March 28, company executives Henry Juszkiewicz and David Berryman (known as the shareholders) engaged in negotiations with KKR Credit Advisors LLC concerning a “potential transaction involving a change of control that would result in the company being substantially deleveraged through a debt-to-equity conversion pursuant to which the shareholders would receive some cash and/or warrants.”
The negotiations concluded on March 28, as the shareholders and KKR were “significantly divergent” in their views regarding the appropriate consideration for the various parties involved.
During these negotiations, in support of these shareholders’ position on illustrative potential future enterprise value for the company’s MI/pro audio businesses, the shareholders provided KKR with implied future equity values for the MI business based on an Adjusted EBITDA range of $60-$65 million and an assumed EBITDA Multiple of 10.7x.
Gibson said it has contacted and/or is in discussions with other potential investors about refinancing its bonds, when they mature, and other debt and equity investments in the company; however, no guarantee can be made as to the outcome of those discussions.