Invacare Completes Financial Restructuring

• By Laurie Watanabe
• May 10, 2023

In a May 8 announcement, Invacare Holdings Corp. said it has completed its financial restructuring.

The announcement said Invacare “successfully emerged from Chapter 11 on May 5, 2023.” The restructuring includes Invacare subsidiaries Freedom Designs Inc. and Adaptive Switch Laboratories.

In the announcement, Geoffrey P. Purtill, Invacare’s President/CEO, said, “This marks the start of a new era for Invacare. With Chapter 11 behind us, we look to renew our commitment to operational excellence and drive profitable long-term growth in our core lifestyle and mobility and seating product categories.

“Invacare is well-positioned to capitalize on global tailwinds in the markets we serve. We continue to manufacture and deliver vital healthcare products to our customers and each day focus on our purpose of ‘Making Life’s Experiences Possible’ for our end-users. Importantly, I want to express my gratitude to our associates for their unyielding commitment to Invacare. We now have a fresh start and a great opportunity to reshape the business for the future and realize our long-term growth potential.”

A Change in Product Focus

Invacare filed for Chapter 11 approximately three months ago, and the company now “emerges with a plan of reorganization that was supported by the key stakeholders, including support by nearly all creditor classes eligible to vote on the plan of reorganization,” the announcement said. “As a result of the reorganization, Invacare Holdings Corp. becomes the new parent company of Invacare’s global operations.”

In January and ahead of the Chapter 11 announcement, Invacare said it had sold its respiratory assets to Ventec Systems, a subsidiary of React Health. Also in January, Invacare completed the sale of its Top End sports wheelchair division to Top End Sports LLC. In a Feb. 1 press release, Invacare said, “These divestitures will enable the company to put its full focus on strengthening its core businesses and driving sustainable growth.”

The current Invacare product portfolio includes seating and positioning; power and manual wheelchairs, including power-assist systems; beds and mattresses; and patient aids, including patient lifts and slings, bath safety equipment, and walking aids.

Details of the Financial Restructuring

In the announcement, Invacare listed transactions that were part of its successfully recapitalized balance sheet:

— Equity Rights Offering: Invacare “successfully executed a $75 million rights offering of new Common Stock and 9 Percent Series A Convertible Preferred Stock,” the announcement said.

— Exit Term Loan Facility and Secured Convertible Notes: The exit capital structure includes an Exit Term Loan Facility of $85 million and 7.5-percent Exit Secured Convertible Notes of $46.5 million that mature in 2028.

— Asset-Based Lending Facility: Invacare finalized a new North America ABL credit facility with borrowing capacity up to $40 million. The company borrowed $13.4 million on emergence, the announcement added.

Kathy Leneghan, Invacare’s Senior VP and CFO, said in the announcement, “We are pleased to have secured new financing, which will provide additional flexibility. With a sustainable capital structure and enhanced balance sheet, we can now fully focus our efforts on executing our global transformation plan.”

Invacare Changes Board of Directors

The Invacare announcement also introduced a new board of directors “to better reflect the company’s new ownership and its continued drive to strengthen the business.”

Steven H. Rosen, co-founder and co-CEO of Resilience Capital Partners LLC, takes over as the new chairman of the board, with Purtill continuing to serve as a director.

Also on the new board are Marec E. Edgar, President/CEO, A.M. Castle & Co.; Abraham T. Han, Managing Director, GLC Advisors & Co. LLC; Peter J. Kuipers, EVP/CFO, Omnicell Inc.; Kimberly S. Lody, former President/CEO, Sonida Senior Living; and Randel G. Owen, former President/CEO, Global Medical Response.

Clifford D. Nastas, Edward F. Crawford, Petra Danielsohn-Weil, Marc M. Gibeley, Michael J. Merriman Jr., and Aron I. Schwartz have left the board.

Invacare’s current management team remains in place under Purtill.