Consulting Firm BRG Suffers Cyberattack Amid Debt Sale for LBO
Bloomberg) — Berkeley Research Group suffered a cyberattack last week, according to people with knowledge of the matter, just as banks have been looking to wrap up a debt sale that would finance the consulting firm’s buyout by TowerBrook Capital Partners. The firm discovered its systems had been breached on March 2, and received several ransomware notices from a hacker, according to the people, who asked not to be identified discussing a private transaction.
The hacker claimed they had taken data from BRG’s systems and had encrypted files within its network, the people added. Sign In or Create an Account
BRG Hires Data-Security Firm to Deal with Breach
BRG has hired data-security firm Octillo Law as well as Booz Allen Hamilton Inc.’s cyber team to deal with the breach, according to a notice sent to the company’s prospective loan investors and seen by Bloomberg News. “The BRG IT team has worked around the clock with substantial support from Booz Allen to restore the network, analyze how the attack was carried out and put the data that was not encrypted by the threat actor back into service,” the memo said. BRG, which has advised companies such as Forever 21 Inc., has comprehensive cyber insurance, the memo added.
The document did not specify the type of data affected or the extent of the attack. A representative for TowerBrook declined to respond to requests for comment, while representatives for BRG, Octillo and Booz Allen did not respond to requests for comment either.
Events Coincide with $700 Million Leveraged Loan Sale
The events coincide with a $700 million leveraged loan sale that’s intended to finance TowerBrook’s purchase of a majority equity investment in BRG. That deal, announced last month, is expected to close in April, according to Moody’s Ratings. A group of banks led by Royal Bank of Canada agreed to finance the acquisition, and started to sell the debt in the broadly syndicated market last week.
A loan is being offered at 3.25 percentage points above the Secured Overnight Financing Rate, one of the people said. RBC told potential investors on Thursday that the company will update them on the loan next week, though commitments had been due March 5, according to people with knowledge of the matter.
Potential Investors Concerned About Cyberattack
A group of banks running the deal had asked investors Monday, immediately after the attack, to make a decision on whether they would purchase the loan by Wednesday, said the people. BRG informed prospective investors of the cyberattack on Wednesday, around the time the loan was due.
Some of the prospective buyers of the loan are concerned that the attack could disrupt BRG’s business, said some of the people. BRG consults with clients on a variety of issues from taxes to arbitration and bankruptcy procedures. The firm is advising the US-based operator of Forever 21 as it prepares for a potential bankruptcy filing.
Cyberattacks and Data Breaches are Increasingly a Risk
Cyberattacks and data breaches are increasingly a risk, with many companies facing similar challenges in recent months. MoneyGram International Inc. was also subject to a cyberattack back in September. The payment services firm took out almost $400 million of leveraged loans in 2023 to finance Madison Dearborn Partners’ buyout.
The debt traded down after the incident and an associated class action suit, hovering around 94 cents in October, according to data compiled by Bloomberg. An earlier version of this article corrected the spelling of Booz Allen Hamilton Inc. throughout.
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