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Bain Capital-backed Contec files for bankruptcy protection

30 Aug 2012

Contec Holdings, the New York-based cable box repair business backed by global buyout giant Bain Capital, has filed for bankruptcy protection from its creditors.

The company listed $500m of debt on assets of $100m in Chapter 11 documents filed yesterday in the US Bankruptcy Court in Delaware, US.

“This reorganisation process will allow Contec to invest in and enhance our capabilities to serve our cable industry customers,” Contec COO Wes Hoffman said.

Bain bought Contec in 2008 from American Capital, which said it made about $120m from the sale.

The company has been providing repair services to US cable operators since 1978, and boasts customers such as Motoral, Samsung and Scientific Atlanta Pace.

The move comes at a difficult time for Republican presidential nominee and former Bain Capital head Mitt Romney, who is fighting accusations the firm destroyed companies during his tenure in charge.

Bain Capital claims fewer than five per cent of its portfolio companies over the past 25 years have filed for bankruptcy while under its control, although this does not include bankruptcies which occurred soon after an exit.

A statement from Bain Capital earlier this week said, “While the market leader in its industry, Contec’s financial performance was impacted significantly by a dramatic slowdown in cable subscribers due to the recession, technology shifts, and increased competition.

“We have supported the company through the restructuring process, which we believe will help Contec emerge in an even stronger position to grow its business.”

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