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Dorel Industries (TSX:DII.B) agrees to going-private deal with Cerberus

Consumer
TSX:DII.A
13 November 2020 16:00 (EDT)
Dorel Industries Inc. - President & CEO, Martin Schwartz

Source: La Presse

Dorel Industries (DII.B) will depart the Toronto Stock Exchange pursuant to a going-private transaction with Cerberus Capital Management.

Under the terms of the agreement, Cerberus, through an affiliate, will purchase all of Dorel’s issued and outstanding shares at a price of C$14.50 each. This excludes 4 million Class A Multiple Voting Shares and 2.57 million Class B Subordinate Voting Shares held by senior figures and their families.

This price represents a 32 per cent premium compared to the company’s closing price of $11.02 on September 4, 2020 – the date on which exclusivity was granted to Cerberus.

It marks the end of an 11-month saga that began in December 2019 when majority shareholders informed the company’s Board of Directors of their intentions to take Dorel off the public market.

More than 25 potential buyers were evaluated by BMO Capital Markets, with the final purchase price representing the lower end of TD Securities’ valuation of between $14.00 and $17.00 per share on November 12.

The deal is expected to close early next year, but remains subject to regulatory approval.

“The family shareholders believe that the arrangement is a win for all of Dorel’s stakeholders, including the public shareholders,” said Martin Schwartz, President and CEO of Dorel Industries.

“This transaction will enable Dorel to continue to serve our employees, business partners and other stakeholders, and positions Dorel on a path for continued growth,” he added.

Dorel’s transition to private ownership follows a strong third-quarter performance, which saw a 9.9 per cent increase in revenue compared to the same period last year, driven by increased demand for its bicycles and home furniture products as a result of the COVID-19 pandemic.

Dorel Industries is currently up 0.21 per cent to $14.42 per share at 11:24am EST.

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