Bain Capital Luxembourg Investments, Caisse de dépÃ´t et placement du Québec (CDPQ) and BRP Inc. have entered into an agreement with a syndicate led by underwriters BMO Capital Markets and RBC Capital Markets to complete a secondary offering of BRP stock.
Under the agreement, the underwriters have agreed to purchase 8,000,000 subordinate voting shares of BRP (subordinate voting shares) at a purchase price of $27.85 per share for gross proceeds of approximately $223 million. The net proceeds of the offering will be paid directly to Bain and CDPQ. BRP will not receive any proceeds from the offering.
“Ten years ago, BRP became an independent company from Bombardier,” explains Pierre Pichette, BRP's Vice President of Public Affairs and Communications. “At that time, we had new investors and investment bankers such as Bain Capital and Caisse de depot. It is part of their business strategy to be with a company between five and seven years. They have already been with BRP as shareholders and sponsors for nine years going on ten (as of December 18). The reason we went public (May 2013) was to allow them to capitalize on their investment. We knew at some point that Bain Capital and Caisse de dépÃ´t would chose to sell their shares as a normal routine practice after investing in a company for so many years.”
In May of this year, BRP's initial public offering saw 12,200,000 of its subordinate voting shares offered on the Toronto Stock Exchange listed at a price of $21.50 per share. The IPO generated approximately $262,300,000 for BRP.
In late June, BRP announced that an additional 1,830,000 subordinate voting shares were purchased by underwriters at a price of $21.50, generating gross proceeds of $39,345,000 for BRP.
Now, Bain will be selling 6,720,903 subordinate voting shares to the underwriters, while CDPQ will sell the underwriters 1,279,097 of its subordinate voting shares. The transaction is expected to close on or about October 9. Closing is subject to a number of conditions, including receipt of all necessary regulatory approvals.
Bain currently holds 46,866,424 multiple voting shares of BRP, representing approximately 39.7 percent of the issued and outstanding shares and approximately 46.6 percent of the voting power attached to all of the shares. Following the closing of the offering, Bain will hold 40,145,521 multiple voting shares, representing approximately 34.0 percent of the issued and outstanding shares and approximately 42.8 percent of the voting power attached to all of the Shares.
CDPQ currently holds 8,919,444 multiple voting shares representing approximately 7.6 percent of the issued and outstanding shares and approximately 8.9 percent of the voting power attached to all of the shares. Following the closing of the offering, CDPQ will hold 7,640,347 multiple voting shares, representing approximately 6.5 percent of the issued and outstanding shares and approximately 8.1 percent of the voting power attached to all of the shares.
The subordinate voting shares will be offered by way of a short form prospectus in all of the provinces and territories of Canada and may also be offered by way of private placement in the United States.