Deal Dispatch: Party City Wraps Up, Big Lots Goes Bust, The Container Store Continues

Bankruptcy Block

Party City Holdco Inc., the one-stop-shop for all things celebration, is calling it a wrap. The company’s 700 stores are holding going-out-of-business sales.

This is the second time Party City filed for Chapter 11 bankruptcy protection in two years. In 2023, a restructuring process eliminated almost $1 billion in debt — not enough to keep the party going.

Party City also faced some serious buzzkills like inflation and, per a New York Post interview with the chain’s founder, Steve Mandell, shoddy leadership.

Party City is owned by investment firms such as Capital Group, Davidson Kempner and Silver Point Capital.

The Woodcliff Lake, New Jersey-based company filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.

Over 95% of Party City's 12,000 employees will stay on until Feb. 28 to help with the big cleanup.

The news of Party City’s demise came just days after bankrupt retailer Big Lots BIGGQ failed to find a buyer.

The retailer previously announced it was selling its assets to private equity firm Nexus Capital Management back in September. But now the deal is pretty much off the table.

In true clearance-sale spirit, the company is launching its "going out of business" blowout. It's also keeping hope alive by exploring other options. Whether that's cajoling Nexus back to the table or finding a new buyer remains to be seen.

That’s not all. Benzinga Deal Dispatch reported last month The Container Store was on the verge of bankruptcy. Recall how it was unable to ink a deal with Beyond Inc. The filing became official on Sunday, Dec. 22, in a Texas district court.

But unlike Party City and Big Lots, The Container Store is staying in business.

“Our strategy is sound,” said The Container Store CEO Satish Malhotra.

The beloved storage solutions and in-home services provider is tidying up its finances. Up to 90% of the company's term loan lenders have jumped on board with a transaction support agreement.

The Container Store will have $40 million in fresh funds and $45 million in debt reduction. All this means The Container Store is aiming keep its promises to partners, vendors and stakeholders without a hitch.

The company expects to exit bankruptcy within the next 30 days. When it re-emerges, it will be a private company.

The Container Store’s Elfa business in Sweden remains unaffected.

New On The Block

Viracta Therapeutics, Inc. VIRX is considering a sale. The oncology company — focused on virus-associated cancers — announced the process as part of a strategic review. Viracta voluntarily closed its pivotal Phase 2 NAVAL-1 trial of Nana-val for relapsed/refractory EBV+ lymphomas, citing no new safety concerns. CEO Mark Rothera remains optimistic about Nana-val’s future approval.

Updates From The Block

Buyout firm TPG is in talks to acquire Altus Power AMPS, a solar energy provider to commercial property owners and residential homes, Reuters reported on Dec. 23. A competing bid could emerge.

Alibaba Group Holding Ltd. BABA is close to merging its South Korean operations with E-Mart Inc. in a deal valued at approximately $4 billion. This strategic move aims to bolster their position in South Korea’s competitive online retail market. The potential joint venture would combine the e-commerce assets of both companies. Discussions are ongoing, Bloomberg reported on Thursday.

Notes From The Block

In 2024, private equity and financial investors showed renewed interest, according to Bain & Co. Deal value increased by 29% year-over-year due to slightly lower interest rates.

Corporate M&A, less impacted by minor debt cost changes, is projected to finish the year 12% higher than 2023, with a 7% rise in deal volume across all regions, the firm noted.

“Overall, the level of M&A activity was a middling $3.5 trillion,” the firm noted. “That’s a number consistent with what we saw in the mid-2010s.”

For last week’s Deal Dispatch, click here.

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