"We are excited to have the opportunity to work closely with Roadrunner and its management team and by the significant opportunity to create value for shareholders over the years to come," said Dave Miller, Senior Portfolio Manager and Head of US Restructuring at Elliott Management.Preferred Stock Investment As stated above, a portion of the preferred stock investment serves as a short-term bridge to allow the company to complete an ABL facility. If an ABL facility is not in place within 90 days of closing, this preferred stock investment would convert into a first lien secured note due July 2019. The remaining $300 million preferred stock investment is structured in four series, which have terms of either six or eight years and provide a dividend rate based on current LIBOR of between 8.75% and 16.50%, depending on certain leverage ratios and other factors. A portion of the dividends can be paid in kind at the company's option. The preferred stock has no financial covenants. The company has certain redemption rights including the option to redeem a $90 million series of preferred stock with proceeds from an asset sale or potentially convert that same amount into a second lien, five and one-half year secured note which would have no amortization. There are redemption and liquidation premiums in certain of the series of the preferred stock which would increase Elliott Management's overall return, including a 65% liquidation premium on a $55 million preferred stock series. In addition, one series of the preferred stock, combined with warrants issued as part of the transaction, effectively provide Elliott Management with a 5% common equity economic interest in the company. Finally, subject to regulatory approval, Elliott Management will have the right to appoint up to two board members. Full details of the transaction will be contained in a current report on Form 8-K that the company will file with the U.S. Securities and Exchange Commission.
New Executive Management Team HighlightsCurt Stoelting, Chief Executive Officer
- Joined Roadrunner in early 2016 as President and Chief Operating Officer; previously served as CEO of RC2 Corp from 2003 to 2011 and at TOMY International for two years after they acquired RC2; began career as audit and financial consultant with Arthur Andersen
- Joined Roadrunner in 2016 as Executive Vice President; previously served as Americas CEO of market-research firm TNS, a $2-billion division of British multinational WPP plc; earlier was Executive Vice President and CFO of sister firm Millward Brown
- Joined Roadrunner in January 2017 as CIO; held previous CIO positions at specialty food distributor KeHe and NCH Marketing Services; earlier served as Senior Vice President of Information Technology at IndyMac Bank and as Associate Partner at Accenture
- Joined Roadrunner in 2014 and recently served as Executive Vice President for Risk Management and General Counsel (in his new role Milane remains responsible for risk management); previously served as Managing Director for Risk Management at FedEx Ground and Assistant Vice President of Risk Management for Canal Insurance