MAV MAV Beauty Brands Inc

• Commences Voluntary Proceedings under CCAA in Canada
• Company to Continue Operating Normal Business Operations and Serving Customers As Usual
  
• Receives Commitment for US$3.9 Million in New DIP Financing

VAUGHAN, ON, Nov. 14, 2023 /CNW/ - MAV Beauty Brands Inc. ("MAV Beauty Brands" or the "Company"), a global personal care company, announced that, in order to facilitate a financial and corporate restructuring through a going-concern sale of substantially all of the assets of the Company and its subsidiaries, it has commenced voluntary proceedings under the Companies' Creditors Arrangement Act (Canada) ("CCAA") in the Ontario Superior Court of Justice (Commercial List) (the "Court").

In connection with the CCAA proceedings, the Company has entered into an asset purchase agreement with an affiliate of Nexus Capital Management LP, a Los Angeles-based private equity firm ("Nexus"), pursuant to which, subject to court approval, Nexus has agreed to acquire substantially all of the assets of the Company and its subsidiaries (the "Transaction") for a purchase price significantly less than the current principal amount of the outstanding debt (US$121.7 million). A sale approval hearing is currently expected to take place on November 24, 2023 with the anticipated closing of the Transaction to occur by the end of 2023, subject to the satisfaction or waiver of customary closing conditions.

Michael Cohen, Partner at Nexus, said, "Nexus invests in leading companies and management teams across industries. With MAV Beauty Brands, we see strong long-term potential in the Company's iconic brands, high-quality products, and loyal consumer base." Kayla Dean Obia, Vice President at Nexus, added, "We have established a new capital structure and strategic plan designed to renew growth and profitability, which will enable the Company to invest in new product innovation and build on its partnerships with retailers."

During the CCAA proceedings, it is expected that MAV Beauty Brands' operations will continue uninterrupted in the ordinary course of business. To provide working capital for the Company's operations and to fund the CCAA proceedings, certain of the Company's existing senior secured lenders have committed to provide the Company with an aggregate of US$3.9 million in debtor-in-possession financing (the "DIP Financing"). The continued availability of the DIP Financing is conditional on, among other things, certain conditions being satisfied, including Court approval.

The Transaction and CCAA proceedings are the conclusion of a previously announced strategic review process to identify, review and evaluate potential strategic alternatives. Given the Company's significant existing debt, increased costs and interests rates, a refinancing or amendment of the Company's existing debt was not feasible without a reorganization of the Company's current capital structure. While MAV Beauty Brands made significant efforts to address and improve its performance, it became increasingly apparent during the course of the strategic review process that, absent the legal protection afforded through the CCAA proceedings, the Company's cash position would continue to deteriorate.

Following completion of the strategic review, and after careful consideration of available alternatives and having given due consideration to the interests of all stakeholders, the board of directors of the Company and each of the Company's subsidiaries, with the assistance, input and advice from legal and financial advisors, have determined that commencing the CCAA proceedings and entering into the Transaction is in the best interests of the Company and its subsidiaries. 

In connection with the CCAA proceedings, the Court approved the appointment of Alvarez & Marsal Canada Inc. as monitor of the Company and its subsidiaries (the "Monitor"). Management will remain responsible for the day-to-day operations of the Company and, during the CCAA proceedings, the board of directors of the Company will remain in place, with the Company under the general oversight of the Monitor.

It is anticipated that the trading of the Company's common shares on the Toronto Stock Exchange (the "TSX") will be halted and the TSX will place the Company under delisting review.

MAV Beauty Brands is a global hair care and personal care platform focused on managing independent brands. Today, MAV Beauty Brands markets a diversified portfolio of four complementary brands – Marc Anthony True Professional, Renpure, Cake Beauty and The Mane Choice – offering premium quality hair care, face and body care beauty products. These products are sold in over 25 countries around the world and in many major retailers.

Nexus Capital Management LP is an alternative asset investment management company based in Los Angeles, California that was founded in 2013. Nexus employs a flexible investment mandate that focuses on long-term value creation by partnering with leading management teams and businesses.

For more information on Nexus, please visit www.nexuslp.com.

Additional Information is available at a website maintained by the Monitor, Alvarez & Marsal Canada Inc., at https://www.alvarezandmarsal.com/mav. A copy of the asset purchase agreement will be filed under the Company's profile on SEDAR+ at www.sedarplus.ca.

Certain information in this press release, including the Company's operations continuing uninterrupted in the ordinary course of business during and following the CCAA proceedings, the availability of the DIP Financing, timing for the CCAA proceedings, sale approval hearing and closing of the Transaction, and delisting from the TSX, generally constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events.

Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by MAV Beauty Brands as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the "Risk Factors" section of the Company's most recently filed Annual Information Form, the "Risk Factors" section of the Company's most recently filed MD&A, and the Company's other periodic filings made available at www.sedarplus.ca. These factors are not intended to represent a complete list of the factors that could affect MAV Beauty Brands; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and MAV Beauty Brands expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE MAV Beauty Brands