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Transaction/Case Details

Leon's completes C$700 million acquisition of The Brick

DATE CLOSED

March 29, 2013

BUSINESS SECTOR

General Merchandising / Retail

LEAD OFFICE

Toronto

VALUE

700 Million CAD


OVERVIEW

On March 29, 2013, Leon's Furniture announced the closing of its C$700 million acquisition of The Brick, a publicly traded company 3 times its size, on the 'bet the farm' deal. Through the acquisition Leon's increased its store base from 76 to 306 and is now the largest furniture, mattress and major appliance retailer in Canada, with annual sales of C$2.4 billion. Given the entry of 135 stores into the Canadian market by US retailers Target, the acquisition of the Brick places Leon’s in a more competitive position.

Leon's acquired all outstanding common shares of The Brick for C$5.40 each, and The Brick repurchased all outstanding common share purchase warrants for C$4.40 each. Security holders had the right to receive up to an aggregate of $100 million of Leon's convertible debentures instead of cash; these were fully taken up at closing.

With the completion of the acquisition, The Brick's common shares and common share purchase warrants ceased to be listed on the Toronto Stock Exchange, effective April 1, 2013.

Leon's, headquartered in Toronto, Ontario, is a Canadian furniture superstore. The controlling interest in the company is owned by the Leon family.

The Brick, headquartered in Edmonton, Alberta, is one of Canada's largest volume retailers of furniture, mattresses, appliances and home electronics.

McCarthy Tétrault LLP represented Leon's, as acquiror.The team was led by David Tennant, and consisted of David Woollcombe, Robert Hansen, Garth Girvan, Lara Nathans, Richard O’Doherty, Kevin Wright, Oliver Borgers, Donald Houston, Gabrielle Richards, Patrick McCay, Trevor Lawson, Geoff Hall, Annie Gagnon-Larocque, Jamie Orzech, and Conrad Rego.

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