LBO-Backed Bust: Greatwide Logistics

Greatwide Logistics Services, a Dallas, Texas-based provider of third-party logistics, has filed for Chapter 11 bankruptcy protection. Investcorp and Hicks Holdings had acquired a majority stake in the company for $730 million in late 2006, with seller Fenway Partners retaining a minority position. In its bankruptcy filing, the company reported around $600 million in debt.

Greatwide also announced a deal to be acquired by a group of its first-lien secured lenders, including affiliates of Centerbridge Capital Partners and D. E. Shaw.

PRESS RELEASE

Greatwide Logistics Services – a national provider of non-asset-based transportation and third-party logistics services – announced today that it intends to enter into an agreement to be acquired by an investor group comprised of its first lien secured lenders, including affiliates of Centerbridge Capital Partners and the D. E. Shaw group.

Greatwide believes that the transaction will allow it to complete its financial restructuring expeditiously while providing an efficient way to address the company’s capital structure needs with no disruption to its operations or customer service. Greatwide expects the sale to reduce its debt and interest burden, enhance its competitiveness and position the company for continued growth and profitability.

“We have been pursuing measures to substantially strengthen our capital structure, and we believe the planned acquisition will accomplish those objectives,” said Raymond B. Greer, President and Chief Executive Officer of Greatwide. “Greatwide’s fundamentals are solid. We believe the proposed transaction is a prudent and necessary step to significantly reduce our debt and interest burden in order to enhance our flexibility to continue to invest and grow.”

To implement the transaction, Greatwide will sell the company under Section 363 of the United States Bankruptcy Code. Other parties will have an opportunity to submit higher and better offers to purchase the company under this Court-supervised process and Greatwide anticipates the sale transaction will be completed early next year.

“We believe this process is the best and most certain way to complete our financial restructuring,” said Mr. Greer. “Greatwide is a strong company and we expect that moving forward quickly with this transaction will put the company in a significantly stronger overall financial position, which is good news for our company and those we serve.”

In conjunction with this process, certain members of Greatwide’s existing first lien lender group will provide $73.6 million in new “debtor in possession” financing to support the business through the 363 sale process. Greatwide is pleased to have the strong support of its first lien lenders and expects to receive preliminary approval for the financing by the end of the week. Upon receiving the necessary approvals, the financing facility will be used to fund ongoing operations. In addition, the company will continue to meet all of its obligations to its customers, employees, independent contractors, agents and capacity providers.

Mr. Greer concluded, “We are fortunate that we have a solid and profitable business model and an outstanding blue-chip customer base. We expect that the new financing facility will allow us to continue to meet the needs of our customers, employees, contractors, agents and capacity providers. We look forward to continuing to operate our business as usual while we take this important step to make Greatwide stronger financially.”

Additional information about the Greatwide restructuring is available at the company’s Web site, www.greatwide.com under the News & Media section.

About Greatwide Logistics Services

Founded in Dallas, Texas in 2000, Greatwide Logistics Services is a privately held, $1 billion third-party logistics services company. The company is ranked No. 22 on the Commercial Carrier Journal 250 and No. 24 on the Traffic World Top 100 lists. The company has four primary lines of business: dedicated transport, truckload management, freight brokerage and distribution logistics. Greatwide is one of the nation’s leading non-asset-based logistics providers of transportation, third-party logistics, warehouse/distribution and freight brokerage solutions. For more information, visit www.greatwide.com