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Medical Staffing Network Holdings (OTCBB: MSNW.PK) today announced a deal to sell its assets to its first-lien creditors and that it filed for Chapter 11 bankruptcy protection on July 2.
The purchase price for the assets is $84.1 million, and Medical Staffing Network expects the deal to close before Aug. 31. A sale is also subject to higher bids as approved by the bankruptcy court.
Clients and employees are not expected to be impacted by the Chapter 11 filing, according to the company.
Medical Staffing Network Holdings said it filed bankruptcy court motions to assure that employees receive their usual pay and benefits and to ensure that an escrow deal arranged for its VMS clients and subcontractors will continue.
Lenders have also agreed to provide $15 million of debtor-in-possession financing pending court approval, according to the company.
"We believe that the filing of our Chapter 11 petition and the signing of the asset purchase agreement move us one step closer to emerging from the restructuring process with a capital structure that will allow us to successfully operate our business in the future," said Chairman and CEO Robert Adamson.
Medical Staffing Network's asset purchase agreement calls for the company to be sold to MSN AcquisitionCo LLC, which will be organized and owned by its first lien lenders. Others will also be able to bid on the company with competing bids expected to be due by Aug. 18. Those interested in submitting bids may contact Leon Szlezinger, managing director of Jeffries & Co. Inc., 520 Madison Ave., 7th floor, New York, NY.
Medical Staffing Network Holdings also set up a Web site detailing the Chapter 11 filing and sale process at http://www.msnreorg.com/.
According to the bankruptcy filing, Medical Staffing Network's largest owners include Warburg Pincus Private Equity VIII LP (45.4%), Nautic Management V LP (9.2%) and Artisan Partners Limited Partnership (8.6%).
Boca Raton FL-based Medical Staffing Network ranks as one of the largest healthcare staffing firms with revenue of $340.9 million in 2009.
It announced plans in June to file bankruptcy and said it was working with lenders on a restructuring plan. In April, the company hired Mohsin Meghji of Loughlin Meghji + Company to serve as chief restructuring officer.
It also announced in May an escrow account to handle vendor management system payments to bring a measure of comfort to VMS clients and subcontractors. It is using CBIZ Goldstein Lewin as its escrow agent.
Medical Staffing Network's VMS, OneSource, has contract relationships with approximately 25 healthcare systems. OneSource contracts represented $70 million in annual billings in fiscal 2009, according to court filings.
A court hearing has been scheduled today in this case in the U.S. Bankruptcy Court for the Southern District of Florida.