Australia: Middletons Advises Mitre 10 On A Landmark Deal To Secure A $55 Million Investment
Last Updated: 14 May 2010

Middletons advised Mitre 10 Australia Ltd on two schemes of arrangement under which Metcash effectively acquired 50.1% of the combined Mitre 10 group. The capital injection was overwhelmingly endorsed by shareholders to strengthen Mitre 10's balance sheet, enabling the company to move forward with a strong and experienced partner in Metcash.

Mitre 10 Chief Executive Mark Burrowes said "It is no secret that our competitive landscape has become a whole lot tougher in the last 12 months and this landmark deal will give Mitre 10 the firepower to successfully compete against two big box retailers."

In putting the deal together, Middletons' partner, Jol Rogers commented, "the transaction was structured with some unusual features, whereby Metcash initially acquires a controlling stake then has a right to move to 100% ownership after two or three years. The former Mitre 10 shareholders can call for a trade sale or IPO exit if Metcash does not move to 100% control. The deal borrows features from the private equity space."

Mr Rogers went on to say, "…the deal was be completed in a relatively short space of time with some unique challenges given the complexity of the Mitre 10 business."

Mitre 10’s General Manager Corporate Services, Chris Lloyd, said of Middleton’s contribution, “this transaction was set against highly aggressive time lines. It was never going to be easy to get this over the line on time. The successful and timely completion of this transaction is in no small part due to the creativity that the Middletons team brought to it and their tireless commitment. They are a pleasure to work with and we took great comfort from their sage counsel".

Mr Burrowes is confident that the partnership with Metcash can deliver substantial gains for Mitre 10 when it brings its supply chain, marketing and merchandising expertise to the table. "Metcash has significant experience in highly developed marketplaces and has been hugely successful against two larger players, so we view this arrangement as strategically important to our long term success", Mr Burrowes said.

According to Mr Rogers the inter-conditional schemes of arrangement were adopted by the two parties was "executed efficiently based on a clear understanding of what would ultimately benefit Mitre 10 and its shareholders in the long term."

Mr Rogers led the transaction and was assisted by Middletons' partner Andrew Mansour and lawyer Zoe Towell. Senior associate Stephen Hume assisted with the litigation aspects of the transaction.

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