Deal Dispatch: Chef Boyardee, Crumbl Appear Tasty To Buyers While Bankruptcies Tick Upward - AeroVironmen

New On The Block

TSG Consumer Partners is reportedly eyeing a sweet deal—a minority stake in Crumbl, the Utah-based cookie empire that could be worth a jaw-dropping $2 billion. Meanwhile, Blackstone and Golub Capital are cooking up something too, whipping together a $500 million unitranche loan to help fuel Crumbl's dough-powered expansion. Apparently, big money has a serious sweet tooth.

HistoSonics—a Johnson & Johnson-backed medtech company—is exploring a sale after drawing interest from several big-name suitors. According to the Financial Times, they're aiming for a healthy $2.5 billion valuation. Medical device giants like Medtronic, GE HealthCare and Johnson & Johnson are circling the Ann Arbor-based firm like surgeons around an OR table. The company's non-invasive tech, known as histotripsy—FDA-approved for liver cancer—uses focused ultrasound beams to treat tumors. They’re testing it next on the kidneys and pancreas. Citigroup is running point on the sale process.

Blackhawk Network, the prepaid gift card provider, is in a dual-track process. Silver Lake Management and P2 Capital Partners are exploring a potential sale or IPO with a valuation target of over $5 billion, according to Bloomberg.

Decathlon SA is looking to pass the baton on about 30% of its China business, hoping to raise some cash while keeping its sneakers firmly planted in the country. Bloomberg reports that the French sporting goods giant has hired an adviser and caught the eye of potential investors—but the deal may hit a speed bump, as some suitors are eyeing more than just a minority stake. If the sale goes through, the China arm could be valued north of $1 billion. Still, Decathlon might just bench the whole idea or try other plays to grow in the market. With over 200 stores and 30-plus years in China, they're not ready to hang up their cleats just yet.

Updates From The Block

Sony Group (NYSE:SONY) is considering a spin-off of its chip unit, according to Bloomberg. The chip unit earned nearly $12 billion last fiscal year and produces image sensors used in Apple’s iPhones.

Off The Block

Clearlake Capital completed a majority stake in ModMed, a healthcare SaaS company founded in 2010 that uses AI to improve clinical and operational efficiency. ModMed’s platform includes tools for electronic health records, practice management, revenue cycle management and more. Previous backers include Warburg Pincus, Pentland Capital and Summit Partners.

Chef Boyardee, the ravioli-in-a-can icon created by Italian chef Hector Boiardi (yes, he was real), has fed generations of microwave-happy Americans. It will now be lovingly tucked into the pantry of Hometown Food Co., a Chicago-based portfolio company owned by Brynwood Partners. The acquisition includes a massive 820,000-square-foot plant in Milton, Pennsylvania. On the sell side is Conagra Brands, which scored $600 million on the sale. Hometown also has Hungry Jack and Pillsbury in its lineup.

AeroVironment (NASDAQ:AVAV) completed its purchase of BlueHalo, a space and defense engineering firm, from Arlington Capital Partners for around $4.1 billion in cash and stock, Reuters reported.

Bankruptcy Block

More than 350 Forever 21 stores are set to close by May 1. The fast fashion chain filed for Chapter 11 bankruptcy in March. According to court documents, all 354 leased U.S. locations will be shuttered. The company had said closures might be halted if a buyer stepped forward. As of April 30, no knight in stylish armor had emerged.

Biotech firm Molecular Templates has filed for Chapter 11 bankruptcy as it looks to restructure its operations, The Street reports. Known for developing cancer treatments, the company listed just $2.49 million in assets against a hefty $29.4 million in debt. It's now partnering with lender K2 Health Ventures to keep its research alive—and its lights on.

Diamond Comic Distributors has found two new buyers—Universal Distribution and Ad Populum. The update comes just a day after its original suitor, Alliance Entertainment, sued the company for alleged fraud. The federal bankruptcy court approved the sale of separate divisions to the new buyers, though the deals haven't closed yet. Diamond, which began in a Baltimore basement in the 1970s, filed for bankruptcy earlier this year. Alliance had bid $85 million in March but claims Diamond inflated its value. The new deals are worth less—$42 million and $7.5 million—pending final conditions. Should it work out, they’re expected to close by May 14, per the Baltimore Banner.

Notes From The Block

The deal landscape (including IPOs) is getting quiet, but bankruptcy filings are on the rise.

In April, total individual filings hit 47,323, up 10% year-over-year.

The increase “reflects the mounting financial strain on households, elevated prices, and higher borrowing costs," said Michael Hunter, vice president of bankruptcy data tracker Epiq AACER.

Commercial filings have “softened,” but there has been an “uptick in small business Subchapter V elections,” or Chapter 11 for small businesses looking to restructure their debts. This “signals persistent distress among smaller businesses navigating an uncertain economic landscape,” he said.

April's data comes on the heels of a bleak consumer sentiment report and heightened inflation expectations.

Small businesses are feeling the sting and “seeking relief” via restructuring options, Hunter added.

For the previous edition of Deal Dispatch, click here.

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