CEVA completes private exchange offers and recapitalization efforts

Following its April announcement that it reached an agreement with its major note holders to recapitalize its balance sheet and raise new capital, global third-party logistics (3PL) services provider CEVA Logistics said that this effort is now complete.

CEVA said that through these efforts it will reduce its consolidated net debt by more than $1.7 billion ($1.3 billion euros) and its annual cash interest expense by more than $170 million ($130 million euros) and also receive a capital infusion of a minimum of $301 million ($230 million euros) for investment in its business plan.

CEVA officials said that the Exchange Offers and the Consent Solicitations were conducted in connection with CEVA’s previously announced financial recapitalization plan to reduce substantially CEVA’s overall debt and interest costs, as well as increase liquidity and strengthen its capital structure.  And they added that the Recapitalization will enable CEVA to better serve its customers, accelerate its growth throughout the world and fund the development of new supply chain products and services.

“We are pleased to be successfully completing the Recapitalization and are appreciative of the support of our creditors in this effort,” said Marvin Schlanger, CEVA’s Chief Executive Officer, in a statement. “CEVA is now a much stronger competitor in the Supply Chain Industry and we look forward to growing with our customers around the world. This is a transformational transaction that positions CEVA to better serve our customers and develop new supply chain solutions and services to meet their needs.”

In a recent interview with LM, Schlanger said that these efforts will make for a stronger balance sheet for CEVA, which will enable the company to grow faster and better compete in the logistics and supply chain marketplace.

“We will have the flexibility of making additional capex investments, which will allow us to better serve our customers as they grow globally, and it will allow us to build and sell new supply chain products,” he said. “That is very important as the supply chain sector moves forward over the next few years. It is very important and very good for CEVA and strengthens us significantly, and we think that can only be positive for our customers as this transaction allows us to do more for them in terms of better service, more products, more locations and more growth.”

In terms of some of the benefits of increased capex investment, Schlanger said that CEVA’s customers are demanding more transparency and more visibility and more tractability and control of their supply chains at any given point in time.

Part of the gains, he said, will come in increased IT functionality and applications to meet the needs of customers.
“I think we will be in a position to move forward to make more investments into these kinds of IT products our customers are asking for and will allow us to differentiate ourselves from the competition,” he said.