Buyout Sparks Mountain of Hope : Mountaineering: Employees of Ventura-based rock-climbing gear company celebrate their purchase.

In an unlikely business deal involving outdoorsmen turned entrepreneurs, employees of a Ventura-based mountaineering gear company pulled together a few million dollars to buy out their employer, forming a new company without a day’s break in production or sales.

Former Chouinard Equipment employees, now 51%owners of the new company, Black Diamond, celebrated the deal’s culmination with a bash at company offices in east Ventura on Tuesday.

“We have a very committed group of employees,” said Peter Metcalf, the former general manager at Chouinard and now president and chief operating officer of Black Diamond. “We had to overcome a lot of problems to do this. I feel very fortunate we were able to pull it off.”

On Nov. 20, the employees signed agreements with Lost Arrow, the parent company of Chouinard Equipment, Patagonia Inc. and other companies that manufacture outdoor clothing and gear.

Nov. 30 was Chouinard Equipment’s last day of operations, and Black Diamond took over Dec. 1, Metcalf said.

The buyout follows last spring’s surprise bankruptcy filing by Chouinard Equipment. That move was designed to protect the deeper pockets of Lost Arrow from four lawsuits that claimed faulty instructions on the use of Chouinard Equipment products was responsible for injury to climbers.

Lost Arrow has declined to comment on the suits.

Jim Cegelski, an investment banker with a Los Angeles firm, helped 64 employees who had very little cash put together a deal to buy Chouinard Equipment’s assets, which Metcalf said were between $2.5 million and $4 million.

Chouinard Equipment, which manufactures technical rock-climbing gear such as pitons, carabiners, ice axes and chocks, the wedge-shaped pieces used to help climbers secure their positions, had sales of $7 million in the last fiscal year, Metcalf said.

Cegelski called the deal an unusual arrangement that came together in the nick of time.

“Small firms like this generally don’t survive a Chapter 11,” said Cegelski, who was in Ventura for the celebration. “The first thing that usually happens is that employees start leaving. We were very fortunate to bring this to the table in seven months; frankly I don’t know that the business would have survived much longer.”

The deal Cegelski developed after seven months of negotiations allowed employees to take money from their 401K retirement accounts and roll those accounts over into a fund that purchased stock in Black Diamond. Those employees who had extra money, like Metcalf, also bought stock directly in the company.

That amounted to just over 50%, to give the employees the controlling interest. Black Diamond also sold stock to “like-minded” investors, such as Naoe Sakashita, who heads a company coincidentally called Lost Arrow Japan, which has no relation to the Ventura company. Sakashita, a mountain climber of world renown, according to Metcalf, contributed substantially. Michel Beal, a French manufacturer of ropes for Black Diamond, also bought in.

About two-thirds of the sale price was financed by a loan, Metcalf said.

Lost Arrow and Patagonia will buy equipment from Black Diamond to sell at its retail stores, as it did from its subsidiary, but now it will buy on a competitive basis, said Lost Arrow spokesman Kevin Sweeney. The Black Diamond company employees, many of whom are friends or spouses of Lost Arrow employees, are now on their own, Sweeney said.

“It’s a completely separate company,” he said.