공시 • Feb 16
A group led by affiliates of Cerberus Capital Management, L.P., Martin Schwartz, Jeffrey Schwartz, Alan Schwartz and Jeff Segel cancelled the acquisition of the remaining 80.8% stake in Dorel Industries Inc. (TSX:DII.B) from Letko, Brosseau & Associates Inc., Brandes Investment Partners, L.P. and others.
A group led by affiliates of Cerberus Capital Management, L.P., Martin Schwartz, Jeffrey Schwartz, Alan Schwartz and Jeff Segel entered into an agreement in principle to acquire the remaining 80.8% stake in Dorel Industries Inc. (TSX:DII.B) from Letko, Brosseau & Associates Inc., Brandes Investment Partners, L.P. and others for approximately CAD 400 million on November 2, 2020. As of November 12, 2020, A group led by affiliates of Cerberus Capital Management, L.P., Martin Schwartz, Jeffrey Schwartz, Alan Schwartz and Jeff Segel entered into a definitive agreement to acquire the remaining 80.8% stake in Dorel Industries Inc. from Letko, Brosseau & Associates Inc., Brandes Investment Partners, L.P. and others for approximately CAD 400 million. Under the terms of the consideration, the buyer group will pay CAD 14.5 per share. The cash consideration to be paid to the public shareholders will be financed through a combination of cash funded by the buyers group and by Koch Equity Development LLC and committed financing from a group of lenders. As per filing on February 1, 2021 the offer per share increased from CAD 14.5 to CAD 16 per share and now buyer will acquire the remaining 80.8% stake in Dorel Industries for approximately CAD 440 million. The family shareholders own an aggregate of 4.009 million Class A Multiple Voting Shares and 2.574 million Class B Subordinate Voting Shares representing 95.7% of Dorel’s 4.2 million issued and outstanding Class A Multiple Voting Shares and 9.1% of its 28.32 million issued and outstanding Class B Subordinate Voting Shares. The Family shareholders will remain shareholders of Dorel following closing of the arrangement. The purchaser has agreed to pay Dorel Industries, a termination fee of CAD 23.6 million. In case of termination, Dorel Industries will pay a termination fee of CAD 14.1 million to purchaser.
The transaction is subject to Dorel shareholder, execution of dissidents rights, regulatory and court approvals, including approval by a majority of votes cast by Dorel’s minority shareholders (excluding the family shareholders, their immediate families and other holders of Class A Multiple Voting Shares) and definitive agreement being signed. The approval of the arrangement resolution will require the affirmative vote of at least (i) two-thirds (66 2/3%) of the votes of the Shareholders present in person or represented by proxy at the Meeting and entitled to vote, and (ii) a majority (50% + 1) of the votes cast by the holders of Class B Subordinate Voting Shares present in person or represented by proxy at the Meeting. The buyer group have been granted an exclusivity period through November 10, 2020 to complete negotiations and enter into a definitive agreement. The board of directors formed a special committee of independent directors comprising of Norman M. Steinberg (chair), Alain Benedetti, Dian Cohen, Brad A. Johnson, Sharon Ranson and Maurice Tousson. As of November 13, 2020, special committee of independent directors unanimously approved the transaction after receiving fairness opinions from TD Securities and Bank of Montreal. As of November 11, 2020, the ten-day exclusivity period granted to a buyer group has been automatically extended in accordance with the terms of the exclusivity agreement for a further period of seven days, through November 17, 2020. A special meeting of the holders of Class A Multiple Voting Shares and Class B Subordinate Voting Shares (collectively, the “Shares”) of Dorel will be held virtually on January 12, 2021. As of December 24, 2020, meeting of shareholders of Dorel Industries Inc. will be held on February 16, 2020. As of December 8, 2020, Brandes Investment Partners, L.P., which on behalf of its investment advisory clients holds approximately 7% of the outstanding class B subordinate shares of Dorel Industries, Inc. announced its intention to vote against the going-private transaction. As of December 9, 2020, Letko, Brosseau & Associates Inc., an independent investment manager that exercises investment control or direction over approximately 12.8% of the outstanding class B subordinate shares of Dorel Industries announced its intention to vote against the proposed going private transaction. As of December 18, 2020, Letko, Brosseau & Associates Inc. reaffirmed its intention to vote against the proposed transaction. As of December 21, 2020, the Board of Directors of Dorel Industries unanimously recommended the shareholders to vote in favour of the transaction. As of December 23, 2020, FTC granted early termination of antitrust approval waiting period. As of December 29, 2020, Dorel Industries, acting on the unanimous recommendation of the Special Committee comprised of Dorel's six independent directors, is postponing the special meeting of Dorel shareholders to February 16, 2021 to approve the transaction. As of February 4, 2021, European Commission cleared the transaction. The transaction is expected to close early in 2021.
BMO Nesbitt Burns Inc. and TD Securities Inc. acted as the financial advisors and fairness opinion providers and McCarthy Tétrault LLP acted as the legal advisor for the special committee of Dorel. Fasken Martineau DuMoulin LLP acted as legal advisor to Dorel. Rothschild & Co SCA (ENXTPA:ROTH) acted as financial advisor, Kirkland & Ellis LLP and Blake, Cassels & Graydon LLP legal advisors to Cerberus Capital. Houlihan Lokey Capital, Inc. is acting as placement agent to Cerberus. Davies Ward Phillips & Vineberg LLP is acting as legal counsel to the selling shareholders. Alex Gorka and Brett Anderson of Osler, Hoskin & Harcourt LLP is acting as legal advisors to Koch Equity Development. Kingsdale Advisors acted as proxy solicitor to Dorel. UBS acted as financial advisor to Koch Equity Development LLC in connection with the acquisition of Dorel Industries.
A group led by affiliates of Cerberus Capital Management, L.P., Martin Schwartz, Jeffrey Schwartz, Alan Schwartz and Jeff Segel cancelled the acquisition of the remaining 80.8% stake in Dorel Industries Inc. (TSX:DII.B) from Letko, Brosseau & Associates Inc., Brandes Investment Partners, L.P. and others on February 15, 2021. The termination of the Arrangement Agreement follows exchanges and discussions between Dorel and many of its shareholders and review by Dorel of proxy votes. The termination of the Arrangement Agreement was unanimously approved by the Board of Directors of Dorel.