A global alternative investment firm Strategic Value Partners has entered into agreement with Hornblower Group to acquire the majority ownership of the company in exchange for significant equity investment. As part of the agreement, Crestview Partners retained minority ownership in the business, and the decision was made to sell or wind down the company’s overnight cruises unit American Queen Voyages.
Aside from significant minority stake in the business, Crestview will become the sole owner of Journey Beyond, a stand-alone operating unit of Hornblower and the leading experiential travel provider in Australia.
The agreement also provides for Hornblower to receive $121 million in new-money financing from SVP-managed funds and Crestview, and the company’s total debt will be reduced by approximately $720 million.
As part of the agreement, Hornblower’s overnight cruising business American Queen Voyages (AQV) will be sold or, if a sale cannot be achieved, its operations will be wound down.
Hornblower is taking this action because of the underperformance of AQV, which has not rebounded from the pandemic, the company said.
These collective actions are expected to enable Hornblower to move ahead with a more focused portfolio, stronger balance sheet and additional financial flexibility, well-positioned to continue driving growth in its core land- and water-based experiences businesses.
Outside of AQV, Hornblower’s current services will not be impacted in any way by the transaction, the company confirmed.
To efficiently implement the agreement and ensure an orderly sale or wind-down of AQV, Hornblower and certain of its affiliates have initiated a voluntary court-supervised and pre-arranged process under Chapter 11 of the U.S. Bankruptcy Code.
Due to the overwhelming support of its investors, Hornblower expects to move through this process on an accelerated basis and emerge from Chapter 11 in approximately four months.
In connection with this process, Hornblower has received a commitment for $300 million in debtor-in-possession (DIP) financing from Deutsche Bank Private Credit & Infrastructure to refinance the Company’s existing super priority term loan, in addition to the $121 million in new-money financing from SVP-managed funds and Crestview.
Following court approval, this new financing, combined with cash generated from ongoing operations, is expected to support the business during the court-supervised process.
Separately, the company is commencing ancillary proceedings in Canada under the Companies’ Creditors Arrangement Act (CCAA) seeking recognition of the U.S. Chapter 11 proceedings in Canada.
Journey Beyond is not included in the court-supervised process.
“The steps we are taking today will enable us to address AQV and strengthen our financial foundation as we continue serving our guests and commuters around the world. With the support of our financial stakeholders, we will continue to advance our business initiatives and drive growth. We thank the entire Hornblower team for their hard work and dedication, as well as our vendors and partners across our businesses for their continued support,” said Kevin Rabbitt, Chief Executive Officer, Hornblower Group.
