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SmileDirectClub, the Nashville-based remote teeth alignment company that wooed big investors and achieved lofty valuations before struggling upon going public, has filed for bankruptcy.
According to Yahoo Finance, the company will maintain operations thanks to an infusion of $20 million from founders Alex Fenkell and Jordan Katzman. A restructuring process is expected to be “brief.”
Kirkland & Ellis, FTI Consulting and Centerview Partners are advising SmileDirectClub in the process. Reorg Resources reported in August that the company was working with restructuring advisers and considering filing for bankruptcy.
Fenkell and Katzman launched the company in 2014 with seed money from Katsman’s father, David Katzman, who has run the company.
“This transaction is designed to ensure our future financial structure reflects the talent of our team members and the quality of our business, and I am excited about the future ahead,” David Katzman said Friday. “I look forward to continuing to work alongside leadership and our talented team to transform smiles with the reliability and quality our customers deserve.”
In a final big fundraising push before going public in 2019, SmileDirectClub raised $380 million in a round led by private equity firm Clayton Dubilier & Rice, valuing the company at a reported $3.2 billion. Clayton Dubilier & Rice became SmileDirectClub’s top institutional investor but by the end of 2022 had sold all of its stake in the company. The state of Tennessee also granted SmileDirectClub millions of dollars in economic development incentives.
In recent years, SmileDirectClub has looked to cut costs and scaled back on international operations in efforts to revive the once-hot business and achieve profitability. It has struggled to get its stock price north of $1, leading the Nasdaq to warn that the company could be yanked from the exchange.
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