On October 30, 2020, Kingswood Capital Management, LP (Kingswood) completed its acquisition of substantially all of Mountain Equipment Co-op (MEC)'s assets through the Companies' Creditiors Arrangement Act (CCAA).
MEC is Canada's go-to retailer for rock solid outdoor gear, expert advice and endless open air inspiration.
Kingswood is a U.S. private investment firm primarily focused on investing in businesses in transition.
Kingswood completed the acquisition of substantially all of MEC’s assets through MEC’s insolvency proceedings commenced under the CCAA. The value of the deal was C$120 million (subject to working capital adjustments).
MEC is an established retailer and premier brand in Canada, and is Canada's go-to place for outdoor gear, know-how, and inspiration. Established in 1971, MEC has been Canada's largest consumer co-operative with over 5 million members across the country. The acquisition of MEC by Kingswood received intense worldwide media scrutiny because the effect of the transaction was that MEC would be converted from a British Columbia co-operative (owned by its members) to a newly formed British Columbia corporation owned by a U.S. private equity firm.
MEC was facing a severe liquidity crisis which required it to implement a restructuring under the CCAA. Kingswood was the successful bidder in a sale process run by MEC, acquiring substantially all of MEC’s assets. The sale of MEC to Kingswood closed on October 30, 2020, and resulted in a going concern solution for MEC’s business with 21 of its 22 stores remaining open and over 85% of its active staff being retained by the purchaser.
The acquisition created a positive path forward for MEC strengthening the brand, preserving jobs and opportunity for employees, and enabling MEC to continue to be the outdoor supplier of choice for Canadians.
Fasken advised Kingswood Capital Management with a team led by Dylan Chochla which included Nicole Park, Kibben Jackson, Dan Law, Grant McGlaughlin, Armand Benitah, Nathan Haldane, Alexis Shamess, Sergio Custodio, Kristian Arciaga and Cara Chu.
Jurisdiction
- British Columbia
