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Apollo among Gymboree’s new owners

The New York-based distressed debt investment firm acquired the chain of children’s apparel shops in a Chapter 11 restructuring.

Gymboree Corporation has emerged from bankruptcy under the ownership of a cadre of distressed debt investors – including Apollo Global Investment Management – through a debt-for-equity swap.

The San Francisco-based children’s retailer – which sought court protection after a $1.8 billion buyout by Bain Capital, which contributed $524 million – said on Friday it exited Chapter 11 in the hands of its pre-bankruptcy term loan lenders.

Alongside Apollo, new owners of the company include Searchlight, Apollo Global Management, Oppenheimerfunds, Brigade Capital Management, Marblegate, Nomura Securities International and Tricadia Capital Management, according to the statement.

In addition, Gymboree will receive two new exit financing facilities: an $85 million term loan from Goldman Sachs and a $200 million revolving credit facility from Bank of America and Citizens.

Daniel Griesemer, Gymboree’s president and chief executive officer, said in a statement: “With the support of our new equity owners, this process has allowed us to secure the company’s long-term financial health, and we are excited about the opportunities ahead as we turn our full focus toward executing our strategic product, brand and omni-channel initiatives.”

Gymboree sought court protection in June after succumbing to its highly-levered balance sheet along with changing consumer tastes.

The company filed for bankruptcy with a restructuring support agreement in place to which Bain and the other prepetition term loan lenders were party. Gymboree received $378.5 million of debtor-in-possession financing: a $105 million term loan from certain term loan lenders and a $273.5 million asset-based loan, on which Bank of America was administrative agent.