Aurora Foods Inc, a St Louis MO-based producer and marketer of frozen food brands, has entered into a definitive agreement regarding its previously announced agreement in principle with J W Childs Associates LP. Under terms of the agreement, J W Childs will make a $200 million equity investment in Aurora in a transaction valued at about $925 million.
The equity investment by J W Childs is part of a financial restructuring designed to reduce Aurora’s outstanding indebtedness, strengthen its balance sheet, and improve its liquidity. J W Childs is a Boston MA-based private equity investment firm with more than $3.4 billion of equity capital under management.
Terms of the agreement call for J W Childs to purchase shares of Aurora’s common stock representing a 65.6% equity interest in the reorganized company. J W Childs will be entitled to designate a majority of members on Aurora’s board of directors. After restructuring, Aurora’s existing common and preferred stockholders will hold about 4.9% of the reorganized company’s outstanding equity, according to the agreement.
Aurora intends to use the $200 million of proceeds from the sale of common stock to consummate the restructuring and to pay down debt.