Eden Prairie balloon-maker Anagram files for Chapter 11 bankruptcy

Anagram International — an Eden Prairie foil balloon manufacturer that supplies balloons for Party City stores and other retailers — announced this week it is seeking a new owner and has filed for Chapter 11 bankruptcy protection.

Anagram, founded in 1977, is currently a wholly owned subsidiary of New Jersey-based Party City, which itself filed for Chapter 11 bankruptcy in January. In October, Party City announced the completion of its restructuring process that led to the company eliminating nearly $1 billion in debt, though Anagram was not part of that nor the Chapter 11 proceedings.

Celebration Bidco LLC has agreed to terms to acquire Anagram's assets as the stalking horse bidder, meaning it set the bidding bar that other entities can't undercut, according to the release and court documents. The agreement is subject to higher offers from other entities and court approval.

"Having carefully reviewed all available strategic options, we believe that a sale of the business will provide Anagram with the best path forward to accelerate global growth and strengthen our market leadership," said Adrian Frankum, Anagram's chief restructuring officer, in a statement.

In its announcement, Anagram stated it wants to complete the sale process before the end of the year. It also said Celebration Bidco has committed to hiring Anagram's roughly 350 employees, who, pending court disapproval, will continue to receive paychecks and benefits without interruption.

Anagram has between 200 and 999 creditors — the largest unsecured claim of $1.08 million belonging to an IT services provider in St. Paul — and estimated assets of $100 million to $500 million, per court documents. Anagram filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas.

Anagram has received a commitment of $22 million in debtor-in-possession financing, a method of financing for companies in bankruptcy to help fund operations through the process.

According to Party City's most recent financial filing in November 2022, through the first nine months of 2022, Anagram generated $153.7 million in revenue with a net income of $1.6 million and total assets of $220.1 million.

Anagram's sales had been declining, per the filing, mostly because the company was experiencing "continued tightening of helium supply" at certain retailers. Anagram, which supplies its balloons in more than 140 countries, had revenue of $224.3 million and $157.1 million, respectively, in 2021 and 2020, with total assets of $201.9 million and $176.2 million for those respective years.

In May 2021, Anagram entered into a $15 million revolving line of credit. By the end of September 2022, there was $14.4 million remaining on that line of credit, according to Party City financial documents.