Carlyle’s Acosta Files Bankruptcy as Marketing Budgets Dry Up

(Bloomberg) — Acosta Inc., the marketing firm owned by Carlyle Group LP, has gone bankrupt after big consumer-product firms decided to do more of the work themselves to keep up with changing consumer tastes.The Chapter 11 bankruptcy filing in Wilmington, Delaware, listed liabilities of $1 billion to $10 billion, and no more than $1 billion in assets. Recent records show the company had about $2.85 billion in bonds and loans outstanding, according to data compiled by Bloomberg.Acosta skipped its Oct. 1 bond interest payment and said it was working on a plan that would hand control over to its creditors. The aim is to wipe out debts and give the company a fresh start, Acosta said in a Nov. 8 statement.Investors were expected to commit $250 million in new equity capital. All of Acosta’s bank and bond debt would be swapped into equity, and other unsecured obligations would be covered.Brand HandlersThe company and its rivals including Crossmark Holdings Inc. and Advantage Solutions Inc. are the brands behind the brands on the shelves of retailers like Walmart Inc., Target Corp. and Kroger Co. They make sure major retailers carry their clients’ products and display them well, and sometimes coordinate with the companies on product promotions.Acosta, based in Jacksonville, Florida, helps stock shelves for some of the largest U.S. consumer goods companies and offers sales and marketing services to brands including Campbell’s, Kellogg’s and Coca-Cola.The business has been squeezed as customers handle more of the marketing tasks in-house. They’re dealing with changing consumer behavior, including a shift from packaged goods to fresh foods, and to private label rather than traditional brands, leaving less demand for outside marketing firms.The case is Acosta Inc., 19-bk-12559, U.S District Court for Delaware\–With assistance from Dawn McCarty and Linus Chua.To contact the reporter on this story: Katherine Doherty in New York at [email protected] contact the editors responsible for this story: Rick Green at [email protected], Dawn McCartyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.