Pharm-Olam

Summary

Lender Advisor

Houston, TX

Pharm-Olam is a global contract research organization (CRO) specializing in providing clinical trial services to pharmaceutical, biotechnology, and medical device companies. The company supports the development of innovative therapies and medical products by managing and conducting clinical research across various phases (I-IV) and therapeutic areas.

Carl Marks Advisors (CMA) was engaged to advise the first-lien (1L) lender group on a balance sheet restructuring and negotiations with the private equity sponsor and subordinated debtholders during the challenges of the COVID-19 pandemic.

CMA assessed the company’s business plan, evaluated restructuring proposals, and provided analyses to support decision-making. They guided the 1L group through a UCC Article 9 foreclosure sale to a new entity (NewCo) owned by the 1L lenders.

The restructuring reduced debt, eliminated subordinated obligations, and positioned NewCo for growth with a stronger capital structure, avoiding bankruptcy costs and reputational risks.

Key Challenges

Competitive Market

Limited Liquidity

Covenant Defaults

Uncooperative Capital Structure

COVID-19

Engagement Highlights

CMA assessed the Company’s forward looking business plan and cash flow expectations, which included a new money funding request of $15MM to support a turnaround
CMA evaluated balance sheet restructuring proposals / counterproposals between the existing 1L debtholders and the subordinated debtholders
- Subordinated debt had “hold up” leverage due to the cost and stigma associated with a bankruptcy filing
- CMA provided waterfall analysis and an evaluation of the economics of each restructuring proposal to support the decision making of the 1L
CMA advised the 1L on a UCC Article 9 foreclosure sale to a NewCo entity owned by the 1L bank group
- The restructuring provided $15MM of new money funding, reduced existing 1L debt from $95MM to $30MM and fully wiped away $35MM of subordinated debt
- The NewCo entity was able to position itself for growth with a significantly improved capital structure, while avoiding the cost and stigma associated with a bankruptcy filing

Pharm-Olam

Summary

Lender Advisor

Key Challenges

Engagement Highlights

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