DynaVox Inc., which Mergers & Acquisitions identified as struggling on our Distressed Company Watch List, has filed for Chapter 11 bankruptcy protection to stop a sale organized by its debt owner, and pursue a sale to Tobii Technology AB. Click here for the current version of the Distressed Company Watch List.
DynaVox, a Pittsburgh-based company that develops technology for people with speaking disabilities, filed for Chapter 11 on April 7 to stop a sale of the company. DynaVox filed its petition in the U.S. Bankruptcy Court in the District of Delaware in Wilmington, listing between assets between $10 million and $50 million and liabilities between $1 million and $10 million.
The company's debt owner, JEC-BR Partners LLC, had planned to sell the company at an auction scheduled on April 7. In the company's latest annual report, filed on Nov. 22, DynaVox said that it had defaulted on its credit facility, on which it owed $15.2 million. DynaVox and the lender had come to several forbearance agreements, the latest of which ended on Dec. 6. The original lenders, in February, sold the debt to JEC-BR.
After that, JEC-BR took over the company, removing some members of DynaVox's management and replacing them with its own employees. In March, JEC-BR scheduled an asset sale.
The company looked into strategic alternatives, with assistance from investment bank Bulger Partners, between July and October 2013. DynaVox hasn't yet submitted bidding procedures, but says that it received an offer on April 4 from Swedish company Tobii Technology to buy the company for an amount that is more than what JEC-BR is owed. Tobii plans to provide the company with a $350,000 debtor-in-possession loan to allow it to continue operating during its bankruptcy case.
The company's shares stopped trading on the Nasdaq exchange on April 16, 2013. DynaVox went public on April 27, 2010.
Genovese Joblove & Battista PA is acting as debtor counsel, while Cousins Chipman & Brown LLP are acting as co-counsel.