Dorel Reaches Agreement To Be Taken Private

Dorel Industries has reached an agreement in principle regarding a transaction whereby Dorel would be taken private by a buyer group led by affiliates of Cerberus Capital Management and Martin Schwartz, Jeffrey Schwartz, Alan Schwartz and Jeff Segel.

The buyer group has submitted a non-binding proposal to acquire all of Dorel’s outstanding Class A multiple voting shares and Class B subordinate voting shares not currently held by the family shareholders and their immediate families at a price of Canadian $14.50 per share. Dorel has granted the buyer group exclusivity through November 10, 2020 to complete negotiations and enter into a definitive transaction agreement between Dorel and the buyer group.

The proposal price represents a 32% premium to the closing price of Dorel’s Class B Subordinate Voting Shares on the Toronto Stock Exchange on September 4, 2020, the date on which the family shareholders granted exclusivity to Cerberus.

In December 2019, the family shareholders informed Dorel’s board of directors of their intention to initiate a process to seek a partner for a potential privatization of Dorel. The board of directors formed a special committee of independent directors comprised of Norman M. Steinberg (chair), Alain Benedetti, Dian Cohen, Brad A. Johnson, Sharon Ranson and Maurice Tousson to oversee and supervise the privatization process. BMO Capital Markets was retained as financial advisor to Dorel and conducted a comprehensive process, contacting more than 25 potential financial sponsor partners over a period of eleven months. Following financial and business diligence conducted by, and discussions with, numerous potential interested parties and the review of resulting non-binding proposals by the special committee and the family shareholders, the family shareholders granted exclusivity to Cerberus on September 4, 2020 to complete due diligence and negotiate terms for the proposed privatization.

The family shareholders are Martin Schwartz, Dorel’s president and CEO, Jeffrey Schwartz, evp/chief financial officer, Alan Schwartz, evp/operations, and Jeff Segel, evp/sales and marketing. Each is also a director of Dorel.

The non-binding proposal is subject to Dorel and the buyer group entering into a definitive agreement. The proposed transaction will be subject to shareholder, regulatory and court approvals, including approval by a majority of votes cast by Dorel’s minority shareholders.