Hilco Streambank’s Role
Hilco Streambank was originally retained by the bank agent to value Borders’ intellectual assets to support a junior tranche with a first lien on the intellectual property. Hilco Streambank provided an orderly liquidation value (OLV) range of $10 million to $14 million based on a liquidation scenario that included an operating e-commerce site at the time of sale. Subsequently, Hilco Streambank was engaged by Borders itself, as a chapter 11 debtor, to dispose of the Borders intellectual property assets, including its global trademarks, e-commerce site, customer database, and internet protocol addresses.
Hilco Streambank Canvassed the Marketplace
At its peak, Borders operated more than 1,000 stores, including more than 500 superstores in North America, the United Kingdom, Ireland and the Pacific Rim. Through its various outlets, Borders generated approximately $2.3 billion in revenues for the 2011 fiscal year. Following liquidation of its inventory in bankruptcy, Borders sought to monetize its intellectual property assets. Assets available for sale included Borders’ trademarks, its Borders, Waldenbooks and Brentano’s brands, its e-commerce business, and its vast customer database, comprised of approximately 23 million active members of the Borders Rewards and Borders Rewards Plus programs. Borders was also the assigned holder of a contiguous block of internet protocol addresses.
Hilco Streambank Closed the Deals
Hilco Streambank negotiated the terms of a $3.5 million “stalking horse” bid for the assets. Including the stalking horse bid, Borders received a total of 15 bids from 13 qualified bidders to acquire some or all of its intellectual property assets. Following an auction which lasted approximately 9 hours, Barnes and Noble was declared the winning bidder, with a bid of $13.9 million. Hilco Streambank assisted Borders in completing six additional sales, increasing total proceeds to more than $16 million.