Online advertising company Sizmek has filed for bankruptcy to preserve value and seeks access to capital while the company continues to review strategic alternatives. In the months preceding the filing, Sizmek has been in extended discussions with its stakeholders regarding its continued support of the company as it pursued various strategic alternatives to address its over-leveraged balance sheet.
Despite these ongoing discussions, the company’s primary lender took control of the bank accounts and “sought to divert” customer receivables, thereby cutting off access to capital.
As a result of this action, Sizmek’s board of directors unanimously determined that Chapter 11 protection is the only responsible mechanism by which the company can seek access to capital and preserve value while it continues to explore value-maximising alternatives. The company is also aggressively seeking to access its existing cash, and intends to fully resume normal-course operations as soon as possible.
Established in 1999, Sizmek operates its platform in more than 70 countries. It has offices in throughout Americas, EMEA and APAC. Some of the clients the ad company has worked with include Givenchy, Alfa Romeo, Mountain Dew, TripAdvisor and many others.
On its site, the Sizmek team posted a note to update clients about the state of its business. It highlighted that despite the bankruptcy filing, Sizmek is open for business. Clarifying the US Chapter 11 process, the team said that unlike bankruptcy schemes in other geographies, this code is specifically designed for companies to operate as usual while working to resolve financial issues. The team also assured clients that it is working “diligently” to ensure its platforms experience as little interruption as possible.
“Sizmek’s Board and management team continue to explore all available options, including a potential sale of our business. Thank you for your patience and continued partnership while we evaluate and navigate these next steps,” the note said.