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School Specialty Initiates Financial Restructuring And Enters Into Agreement With Private Investment Firm

Stock quotes in this article: SCHS

Receives Commitment for $50 Million in Additional Financing

Sale and Restructuring to Be Implemented Through Chapter 11 Process; Sale Subject to Court-Supervised Auction for Higher or Better Offers

School Specialty Operations Continue Without Interruption

GREENVILLE, Wis., Jan. 28, 2013 (GLOBE NEWSWIRE) -- School Specialty, Inc. (Nasdaq:SCHS) ("the Company") today announced that it has entered into an asset purchase agreement with an affiliate of Bayside Capital, Inc., under which School Specialty proposes to sell its assets as a going concern through a court-supervised sale process. To facilitate the sale transaction, School Specialty and certain of its subsidiaries today filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware and is pursuing the sale process under Section 363 of the Bankruptcy Code.

In connection with the filing, the Company has secured a new lending arrangement to be provided by School Specialty's existing asset-based lenders and a commitment for $50 million in additional capital in the form of debtor-in-possession financing from an affiliate of Bayside Capital. This financing is intended to provide School Specialty with ample liquidity to operate the business and meet its ongoing obligations to customers, business partners, suppliers and employees through completion of the sale process.

Today's announcement will enable a sale of the business on an expedited basis to Bayside Capital or any higher or better bidder approved by the Court, and its emergence as owned by a financially stronger entity. The Company anticipates completing the sale process in approximately 60-90 days.

School Specialty's President and CEO Michael P. Lavelle, said, "We are pleased to have reached these agreements with Bayside, and are confident School Specialty's business has a bright future. We fully expect to continue normal business operations, providing quality, value-driven education products and excellent customer care and programs. Our customers remain a top priority and we plan to meet all our customer commitments and maintain customer policies and programs.

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