Hello Bello files bankruptcy with stalking horse deal via Hildred

By Sarah Lizee

Olympia, Wash., Oct. 23 – Hello Bello and its affiliates filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on Monday, according to a press release.

The baby and family care products company said it has reached an agreement in principle to be acquired by Hildred Capital Management, a health care-focused private equity firm.

The proposed stalking horse transaction, which provides for a transaction value of about $64.9 million, will be subject to higher or otherwise better offers.

Hello Bello said its secured lenders are supportive of the transaction and have committed to provide $47 million in debtor-in-possession financing.

The facility will consist of a $12.07 million new revolver and a $34.93 million rollup of prepetition debt.

Interest will be adjusted term SOFR, subject to a floor of 1.5%, plus 800 basis points.

There will be an unused line fee of 50 bps per annum, a $7,000 per month collateral management fee and a $200,000 upfront fee.

The facility is set to mature in 77 days.

The company said it anticipates that this financing, as well as cash generated from ongoing operations, will be more than sufficient to fund its business operations through the sale process, which it expects to conclude within the next few months.

“Given macroeconomic trends, including inflation and increased shipping costs, we believe that this course of action is the best path forward to ensure that Hello Bello continues to bring families the highest quality and most environmentally friendly products at affordable prices,” Erica Buxton, chief executive officer of Hello Bello, said in the release.

Hello Bello has filed a number of customary first-day motions with the bankruptcy court seeking authorization to support its operations during the court-supervised sale process, including the continued payment of employee wages and benefits without interruption and continued payments to key vendors and suppliers for goods and services.

In its petition, the company listed 200 to 999 creditors, $100 million to $500 million in assets and $100 million to $500 million in liabilities.

Its largest unsecured creditors are Irving Consumer Products Ltd., based in Dieppe, N.B., with a $22.05 million trade payable claim, Industrias Maquin SA de CV, based in Puebla, Mexico, with a $3.05 million trade payable claim, FlexLink System, Inc., based in Allentown, Pa., with a $1.52 million trade payable claim, Facebook, based in Menlo Park, Calif., with a $1.5 million trade payable claim, and CSC Leasing Co., based in Richmond, Va., with a $1.47 million equipment lease claim.

Willkie Farr & Gallagher LLP and Young Conaway Stargatt & Taylor LLP are serving as Hello Bello's legal counsel. Jefferies LLC is serving as investment banker and Emerald Capital Advisors is serving as financial adviser.

Lowenstein Sandler LLP and Alvarez & Marsal North America, LLC are serving as legal counsel and financial adviser, respectively, to Hildred Capital Management.

Pacific Palisades, Calif.-based Hello Bello filed Chapter 11 bankruptcy under case number 23-11759.

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