Incentra Solutions files for Chapter 11 bankruptcy

BOULDER, Colo. - Information technology service provider Incentra Solutions Inc. said late Wednesday it filed for Chapter 11 in Delaware bankruptcy court.

The Boulder, Co.-based company and its senior lenders — a group of investment funds managed by Valens Capital Management LLC and Laurus Capital Management LLC — have signed an asset purchase agreement and agreed to a debtor-in-possession financing facility to ensure the business can continue to operate during the bankruptcy proceedings.

Incentra said the filing will "significantly improve" its balance sheet and cash position. Its revolving credit facility and other DIP financing, along with continuing cash collections, should provide sufficient resources to meet its obligations, Incentra said.

"In today's economic conditions, we are pleased to have achieved such strong support for a sale of the business that is beneficial to our employees, customers, and partners by dramatically improving our balance sheet, eliminating some debt service obligations, and enabling continued investment in our services and future growth," said Chairman and Chief Executive Thomas P. Sweeney, in a statement.

The company plans to complete the sale and have the assets emerge from bankruptcy as quickly as possible. Incentra's board already has approved the asset purchase agreement with its senior lenders.

According to CapitalIQ, the company has total debt of $32.3 million and total assets of $92.5 million, with cash and short-term investments totaling less than $1 million. Its customers include Accenture Ltd., Amylin Pharmaceuticals Inc. and Jack in the Box Inc., among others.

Incentra said its revenue grew 46 percent in 2008 to $212 million, including a 26 percent rise in consulting and outsourcing services revenue.

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