Industrial Fire Protection Company KFI Announces Voluntary Chapter 11 Sale Process

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May 14, 2023, 15:30 ET

Guggenheim Securities to Advise on Sale of Company as a Going Concern

Operations to Continue without Interruption during Chapter 11

ASHLAND, Mass., May 14, 2023 /PRNewswire/ -- Kidde-Fenwal, Inc. (the "Company" or "KFI"), an industrial fire detection and suppression company, today announced that it has filed a petition for voluntary reorganization under chapter 11 of the United States Bankruptcy Code ("Chapter 11") in the United States Bankruptcy Court for the District of Delaware (the "Court"). KFI intends to use the bankruptcy process to explore strategic alternatives, including a sale of the Company as a going concern.

KFI operates two industrial business lines with over $200 million in sales in 2022. The Kidde consumer and commercial businesses are not a part of the filing, and their operations are unaffected.

KFI currently has a strong liquidity position, with over $100 million in cash on hand, and is not seeking debtor-in-possession financing. During the Chapter 11 process, it intends to operate the business in the ordinary course, consistent with past practices.

In March of 2023, the Board of KFI was reconstituted with a majority of independent directors to initiate a strategic review process in light of the substantial claims against the Company related to aqueous film-forming foam ("AFFF"). KFI manufactured and sold AFFF under the brand name National Foam from 2007 to 2013. Although KFI no longer manufactures or sells AFFF, it has been named in over 4,000 lawsuits arising out of these activities prior to its sale of the National Foam business in 2013.

As part of the strategic review, the KFI Board retained Guggenheim Securities to advise on a potential sale of its business. After considering the available alternatives, the Board determined that commencing a sale process in Chapter 11 is in the best interest of KFI and its stakeholders. KFI expects net proceeds from any sale will be made available to pay any AFFF liabilities judicially determined to be due and payable. Any sale would be subject to KFI Board and Court approval.

"This is the right thing to do for all of our stakeholders, including potential AFFF creditors," said Stephen Hannan, Chairman of the Board of Directors of KFI. "KFI's businesses are leaders in their respective markets but require a fresh start to attract capital to continue to grow and innovate. Chapter 11 allows the value of the Company's business to be preserved and sold at the best possible price, maximizing everyone's potential recoveries."

Hannan continued, "We will continue to serve our valued customers, suppliers, and employees without interruption as we explore strategic alternatives."

To assist KFI's current management team, James A. Mesterharm and Carrianne Basler, both Managing Directors and Partners at AlixPartners, have joined the Company as Chief Transformation Officer and Deputy Chief Transformation Officer, respectively.

KFI also announced that the current owner of the Company, Carrier Global Corporation ("Carrier"), has determined that KFI is not a strategic fit for Carrier. At KFI's request, Carrier has agreed to provide corporate services to KFI during the Chapter 11 case on arm's-length terms and to offer certain transition services to any buyer in a Chapter 11 sale.

KFI is being advised by Guggenheim Securities as investment banker, AP Services, an affiliate of AlixPartners, as financial and restructuring advisor, and Sullivan & Cromwell LLP and Morris, Nichols, Arsht & Tunnell LLP as legal counsel. KFI's independent directors are represented by Schulte, Roth & Zabel LLP.

Court filings and information about the Chapter 11 cases are available on a separate website (https://cases.stretto.com/KFI) administered by KFI's claims agent, Stretto. Information is also available by calling (866) 887-0488 (Toll-Free) and (949) 889-0128 (International).

About KFI

Kidde-Fenwal, Inc. (KFI) is an industrial fire detection and suppression company that operates two commercial business lines, Kidde Fire Systems and Fenwal Controls. Kidde Fire Systems is a world leader in the development and manufacture of fire detection and suppression systems, serving a wide range of industries including manufacturing, data centers, commercial cooking, marine and more. With a long history of providing standard and custom engineered solutions for many industries, Fenwal Controls offers a broad range of agency-approved gas ignition and temperature controls. KFI was founded in 1987 and is headquartered in Ashland, Mass.

Media Contacts

Robert Mead
Teneo
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Tucker Elcock
Teneo
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Forward Looking Statements

Certain statements in this press release are forward-looking statements, within the meaning of US federal securities laws. Forward-looking statements express views of the Company regarding future plans and expectations. They include statements that include words such as "expect," "intend" and similar words or expressions. These statements are based on numerous assumptions and are subject to known and unknown risks and uncertainties. Actual future results may vary materially from those expressed or implied in these forward-looking statements, and our business, financial condition and results of operations could be materially and adversely affected by numerous factors. As a result, forward-looking statements should be understood to be only predictions and statements of our current beliefs and are not guarantees of performance.

SOURCE Kidde-Fenwal, Inc.