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Spartan completes takeover of Tough Mudder’s UK business

Obstacle-racing company Spartan has completed its acquisition of the UK affiliate of Tough Mudder, announcing that the takeover will allow the mass-participation company to run a full schedule of events in 2020.

Under the deal, Tough Mudder’s UK business will operate as a wholly-owned subsidiary of Spartan and will be operated by the existing London-based team, led by Giles Chater,  managing director, Europe, with the guidance of former global Tough Mudder chief executive Kyle McLaughlin.

The sale will also impact on Tough Mudder’s German business which will continue to be managed by the UK office.

Tough Mudder’s UK operation and its US wing (Tough Mudder Inc.) have been the subject of parallel bankruptcy proceedings in the UK and US, respectively after a standoff between the company’s co-founders, Will Dean and Guy Livingstone, and the company’s largest lender, Active Networks, caused it to cease trading.

In January, Dean and Livingstone were accused of placing the company in a state of paralysis and ignoring the interests of creditors in holding out for a larger share of the company’s proposed sale to rival Spartan Race.

Spartan had made a ‘seven-figure offer’ for the Tough Mudder business in November last year but complained that the inter-company dispute had “rendered Tough Mudder incapable of continuing operations”.

However, staff returned to work at the UK affiliate on January 27 after Michael Solomons and Andrew Pear from restructuring, recovery and insolvency specialists, BM Advisory LLP, were appointed joint administrators of the business.

Spartan underwrote the cost of resuming operations during the administration process to protect the value of the company as it sought to complete the acquisition.

Chater told SportBusiness that Spartan’s help in keeping the UK company running during the administration process would allow it to produce a full schedule of events and that ticket sales have been strong since the company resumed trading.

He said: “Strong ticket sales reflect the strength of the brand and continued support of the awesome community who have stood by us on this journey. We’re looking forward to our 2020 season and sharing the unique Tough Mudder experience which continues to resonate with so many.”

Spartan is also in the process of trying to acquire Tough Mudder’s US business, which is yet to resume trading, but the speed of the bankruptcy proceedings in the country is delaying the sale.

On 11 February the trustee appointed by the United States Bankruptcy Court of Delaware filed a motion approving the sale of the US business to Spartan, ruling that any other arguments or bids must be received by the next hearing on February 25.

However, the US branch had to terminate the contracts of its employees in early February because of the cessation of trading. Spartan is understood to be engaging former employees to be able to resume operations as quickly as possible if the deal goes through.

Sources indicate the delay means the US branch will most probably only be able to honour two-thirds of its 2020 event schedule.

SportBusiness understands Spartan is keen to acquire the US arm of Tough Mudder because it controls some of the company’s intellectual property. But sources say the UK affiliate is entitled to use sufficient Tough Mudder IP to be able to trade, including the rights to use the company logo.

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