Mobile Media

Company Description

MobileMedia Corporation (“MobileMedia” or the “Company”) was one of the largest paging and personal communications service providers in the U.S., offering local, regional and nationwide coverage to over three million subscribers across the U.S. and Caribbean. The Company controlled two one-way nationwide networks and owned two nationwide communications licenses.

Situation Overview

The Company’s strategy of pursuing growth through aggressive acquisitions positioned the Company with the dual challenges of high financial leverage and complex business integration. Competitive pressures within the paging industry due to changes in technology, together with the financial requirements associated with significant interest expense and capital expenditures, forced the Company to pursue a balance sheet restructuring. On January 30, 1997, MobileMedia filed petitions for reorganization under Chapter 11 of the Bankruptcy Code.

Transaction Summary

Blackstone was hired to act as MobileMedia’s financial advisor. Throughout the bankruptcy case, Blackstone developed and evaluated various plans of reorganization based on both a stand-alone financial restructuring and third-party combinations. In addition, Blackstone conducted an extensive marketing and bidding process which resulted in the sale of the Company’s tower assets, thereby realizing hidden value and providing a substantial cash payment to MobileMedia’s stakeholders.

Ultimately, Blackstone’s comprehensive search for and subsequent negotiation with a strategic third-party resulted in a merger with Arch Communications. Through the use of a creative structure involving a $217 million backstopped rights offering to MobileMedia’s unsecured creditors, Blackstone developed and implemented a plan of reorganization which paid MobileMedia’s secured creditors in full and in cash while providing a significant recovery to other stakeholders of the Company.