SmileDirectClub (Nasdaq:SDC) announced that it initiated a process to implement a recapitalization transaction.
The move includes voluntarily filing for protection under Chapter 11 of the U.S. Bankruptcy Code. The Nashville, Tennessee–based maker of clear teeth aligners filed in the U.S. Bankruptcy Court for the Southern District of Texas.
SmileDirectClub says it intends for the recapitalization to bolster its balance sheet and fuel growth initiatives. With additional capital and a stronger financial position gained, the company expects the move to help it “thrive as an international oral care leader for many years to come.”
The company’s founders committed to invest at least $20 million to bolster its balance sheet and protect its financial health. SmileDirectClub expects to have up to $60 million in additional capital available upon the satisfaction of certain conditions.
During the restructuring process, the company expects to provide its dental offerings without disruption. The liquidity received from its founders, plus normal cash flows, ensures this, the company said.
“At SmileDirectClub, we are committed to delivering a premium customer experience and helping over 2 million customers achieve a smile they love. We are taking this step today to help ensure we are well positioned to build upon the success of our SmileMaker Platform and CarePlus offering and to continue our mission of providing safe, convenient, and effective oral care to our customers,” said David Katzman, CEO of SmileDirectClub. “This transaction is designed to ensure our future financial structure reflects the talent of our team members and the quality of our business, and I am excited about the future ahead. I look forward to continuing to work alongside leadership and our talented team to transform smiles with the reliability and quality our customers deserve.”
