KidKraft® Commences Voluntary Prepackaged Chapter 11 Cases to Complete Sale to Strategic Buyer

Secures Approximately $10.5 Million in Debtor-in-Possession Financing

DALLAS, May 10, 2024 /PRNewswire/ -- KidKraft, Inc. and its U.S. and Canadian affiliates (collectively, "KidKraft" or the "Company"), an industry leader in the design and development of branded, wood-based active and imaginative play products including swing sets, doll houses, role play, playhouses, and more, announced today that it has filed voluntary petitions for Chapter 11 relief in the United States Bankruptcy Court for the Northern District of Texas (the "Court") to effectuate a value-maximizing sale transaction to Backyard Products, LLC ("Backyard") that will allow for the continued operation of the business, with the resources to invest in growth across key markets globally.

The Company enters this process with the strong support of its first lien secured lender, its majority shareholder, and Backyard, all of whom executed a restructuring support agreement (the "RSA") prior to the filing. The RSA sets forth the principal terms of the restructuring transaction to be effectuated by the prepackaged chapter 11 plan, including the sale of substantially all of the U.S. and Canadian assets to Backyard pursuant to an asset purchase agreement (the "APA"). The APA sets forth the terms of the sale, which will enable the continued operation of the business as a going concern under new ownership. The Company is targeting closing the sale in approximately two months, subject to approval by the Court and other conditions in the APA, the chapter 11 plan, and related transaction documents.

"Today's announcement marks an important step forward for KidKraft that will position us to continue investing in our industry-leading products and delivering for our valued customers well into the future," said Geoffrey Walker, President and Chief Executive Officer, KidKraft, Inc. "We are confident that with the strong support of new ownership, KidKraft will be on track to continue inspiring imaginative play experiences through our impressive range of high quality products."

As a continuation of its support through the sale process and successful restructuring, the Company has also received a commitment from 1903 Partners, LLC, an affiliate of Gordon Brothers, to provide up to $10.5 million of new money debtor-in-possession ("DIP") financing, subject to Court approval. This financing, combined with cash flow from operations, is expected to enable the Company to continue operations in the ordinary course during the Chapter 11 process and to provide sufficient liquidity to ensure continuity of manufacturing and distribution.

KidKraft has also filed customary motions in the Chapter 11 cases, seeking court approval to continue supporting its operations during this process. These motions, upon approval, will ensure the continued payment of employee wages and benefits, maintenance of customer programs, and other relief measures customary in these circumstances.

The Company's entities incorporated or organized in Canada will also file CCAA recognition proceedings under supervision of the Canadian Bankruptcy Court. Its international operations in Europe, the Pacific, and Asia are not a part of this reorganization process.

Additional information is available through the Company's claims agent, Stretto, Inc., at www.stretto.com/kidkraft. Stakeholders with questions can call 855-469-1713 (Toll Free) or 714-886-6210 (International).

Company Advisors

Vinson & Elkins, LLP, is serving as counsel, Sierra Constellation Partners, LLC is serving as financial advisor, and Baird is serving as investment banker to the Company.

About KidKraft®

KidKraft is a global leader in award-winning products that are MADE FOR MAKE BELIEVE™. The company is committed to inspiring imaginative play creatively for children everywhere through dollhouses, kitchens, outdoor, vehicles, furniture, and toys. KidKraft's high-quality products, designed for traditional play, are available at more than 2,800 retailers in more than 90 countries worldwide. KidKraft's global headquarters are located in Dallas, Texas. For more information, visit www.kidkraft.com and follow @kidkrafttoys on Instagram.

Media Contact:

Geoff Walker
KidKraft, Inc.
[email protected]

SOURCE KidKraft, Inc.