Catalina Reaches Agreement to Sell Japanese Subsidiary and Restructure Balance Sheet to Accelerate Investments in Strategic Growth Areas

Initiates Prepackaged Financial Restructuring with Overwhelming Support
of Financial Stakeholders to Significantly Reduce Debt

Actions Will Strengthen Catalina's Balance Sheet and Accelerate Investment in Technology & Data-Driven Solutions to Facilitate Growth for Long-Term Success

Operations in the U.S., Costa Rica, Europe and Japan Will Continue in the Ordinary Course Throughout the Process 

ST. PETERSBURG, Fla., March 28, 2023 /PRNewswire/ -- Catalina, a market leader in shopper intelligence, today announced that it has reached a definitive agreement to sell its Japanese entity, Catalina Marketing Japan K.K., to Yosemite 2 K.K., which is an equity funded entity of D Capital, Inc. 

In conjunction with the anticipated closing of the transaction, Catalina has entered into a restructuring support agreement (RSA) with more than 99% of its lenders to substantially reduce the company's debt. The targeted balance sheet restructuring provided for in the RSA is a common path forward when a company with strong core business viability and ongoing growth potential is working to strengthen its balance sheet.

In accordance with the RSA, the company has filed voluntary petitions for a prepackaged restructuring under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Together, these actions will strengthen Catalina's balance sheet and enable accelerated investments in strategic growth areas.  

Only Catalina's U.S. operations are part of the court-supervised financial restructuring. Catalina's operations in the U.S., Costa Rica, Europe and Japan will continue as usual throughout the restructuring process, performing business operations and transactions under normal terms with no interruption in service and payments to partners. The company has the financial liquidity to manage its operations during the court-supervised process and beyond. With the overwhelming support of its lenders, Catalina expects to move through this process on an expedited basis and complete the sale and balance sheet restructuring in approximately 30 days. Post-transaction, the Japanese operations will be operated independently as a wholly-owned subsidiary of Yosemite 2 K.K.

"These actions will position Catalina for success with a stronger balance sheet and greater operational and financial flexibility to accelerate investments in strategic growth areas," said Wayne Powers, President and Chief Executive Officer of Catalina. "Our business in Japan is performing well with a strong network of valued retailers and continues to attract leading Japanese brands with our highly targeted solutions. With a strong team and a separate set of customers from the rest of Catalina's business, this transaction will enable our operations in Japan to benefit from D Capital's digital transformation expertise and commitment to grow in the Japan market - and to move forward as a standalone business that is well-capitalized and well-positioned for success in its unique market."

Powers continued, "For Catalina, these actions will allow us to move forward with significantly reduced debt and an infusion of cash to continue advancements in strategic growth areas powered by our AI-enabled data science capabilities, including advanced personalization, measurement as a service, and a portfolio of full funnel marketing solutions that are connected across channels to deliver 1:1 targeted value to consumers whether they are digitally or non-digitally engaged. These are the areas where we plan to grow our business over the next three to five years."

Over the past few years, Catalina has successfully transformed into a data-driven, omni-channel media platform delivering highly targeted, personalized advertising and promotional messages across In-store, connected TV, Out of Home, and digital media with a focus on effectively measuring the results for its retail, CPG brand, and agency partners, providing actionable insights and analytics for optimized marketing efforts and increasing return on investment. 

"Our financial stakeholders believe strongly in Catalina and the value we provide our customers, and their overwhelming support for the actions we are taking will strengthen our capital structure and enhance investments in AI, machine learning and third-party strategic partnerships. These investments will enable us to continue innovating and unlocking relevant new data-driven solutions that deliver meaningful value for consumers ? historically more than $6 billion annually ? and drive unparalleled results for our retail, brand and agency partners," added Powers.

The sale of the business in Japan is subject to Catalina's successful completion of the financial restructuring under the terms outlined in the RSA, among other customary closing conditions. Catalina Marketing Japan K.K. is expected to retain all current employees following the completion of the transaction.

Catalina has filed customary motions with the court seeking authorization to support its operations during the financial restructuring. These include authority to continue payment of employee wages and benefits without interruption. The company intends, subject to court approval, to pay vendors and suppliers in full under normal terms for goods and services provided prior to and after the chapter 11 filing date, with no interruptions.

Additional information is available at Catalina's restructuring website at www.catalinarestructuring.com.

Advisors

Weil, Gotshal & Manges LLP is serving as counsel, Houlihan Lokey Capital is serving as investment banker and FTI Consulting, Inc., is serving as financial advisor to Catalina.

About Catalina

Catalina is a leader in shopper intelligence and highly targeted in-store, TV, radio and digital media that personalizes the shopper journey. Powered by the world's richest real-time shopper database, Catalina helps retailers, CPG brands and agencies optimize every stage of media planning, execution and measurement to deliver $6.1 billion in consumer value annually. Catalina has no higher priority than ensuring the privacy and security of the data entrusted to the company and maintaining consumer trust. Catalina has operations in the United States, Costa Rica, Europe and Japan. To learn more, please visit www.catalina.com.

About D Capital

D Capital, Inc. is Japan's first private equity firm focused on digital transformation ("DX"), pursuing the concept of "DX x PE" with a team comprising leading investment professionals as well as DX professionals. D Capital supports corporate DX by providing its capital, technology, and network to a range of small- and medium-sized Japanese companies, and in doing so helps address Japan's ongoing structural need to improve productivity across industries.

Media Contacts

Wally Petersen/Catalina
312-804-3475
[email protected]

Andrew Siegel / Andrew Squire
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449

SOURCE Catalina