By Robb M. Stewart
MAV Beauty Brands has struck a deal to be acquired by private-equity firm Nexus Capital Management as the financially troubled hair and personal-care company begins proceedings in Canada to avoid bankruptcy.
MAV, whose brands include Marc Anthony True Professional, Renpure, Cake Beauty and the Mane Choice, said Tuesday it began voluntary proceedings under Canada’s Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice.
In connection with the proceedings, it entered an agreement with an affiliate of Los Angeles-based Nexus that will see the investor buy substantially all of the company’s assets for a price significantly less that the $121.7 million amount of debt currently outstanding.
MAV in March launched a strategic review to consider strategic alternatives, including a sale of the loss-making company.
The Canadian company said that after considering options, its board, along with legal and financial advisers, determined that commencing CCAA proceedings and agreeing to the transaction with Nexus was in the best interest of MAV and its subsidiaries. It said a refinancing or an amendment of debt wasn’t feasible without a reorganization of the current capital structure given the significant existing debt, increased costs and interest rates.
MAV said it expects its operations to continue uninterrupted during the CCAA proceedings, and to provide working capital and to fund the CCAA proceedings, certain of its existing senior secured lenders have committed to provide a total of $3.9 million in debtor-in-possession financing.
A sale approval hearing is currently expected to take place Nov. 24, with the transaction anticipated to close by the end of the year, MAV said.
Write to Robb M. Stewart at [email protected]
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