Dorel Announces Increase in Purchase Price for Going-Private Transaction - Seite 2

The conclusions and recommendations of the Special Committee and the Board of Directors are based on a number of factors. In addition to the premiums and TD Securities Valuation referred to above, the Arrangement provides Dorel’s public shareholders with certainty of value and immediate liquidity, contains procedural safeguards for the public shareholders, and is an attractive transaction relative to the status quo, particularly in light of Dorel’s continuing operational challenges.

Based on an aggregate purchase price of approximately US$1.012 billion (including assumed debt plus fees and expenses of approximately US$65 million) and Dorel’s adjusted last twelve months (“LTM”) EBITDA as of September 30, 2020 of US$119.6 million, as set out in the TD Securities Valuation, the Buyer Group will acquire Dorel for approximately 8.5 x adjusted LTM EBITDA.

The purchaser has advised Dorel that it intends to fund the aggregate purchase price (including fees and expenses) of approximately US$1.012 billion plus a contingent tax liability of approximately US$57 million from the following sources:

• US$500 million of funded debt from third-party financing parties;
• US$314 million of preferred and common equity from Cerberus and Koch Equity Development LLC;
• US$83 million of common equity which the Family Shareholders will roll over in the transaction at a deemed price of C$16.00 per share; and
• Committed revolving credit lines to fund (i) the required cash investment in net working capital to support Dorel’s business at current revenue expectations, and (ii) a contingent tax liability in Luxembourg of up to approximately US$57 million plus applicable interest with respect to the transfer of certain assets in connection with an internal corporate reorganization that took place in 2015, as referred to in Dorel’s press release of January 26, 2021.

Pursuant to the Amending Agreement, the termination fee payable by Dorel to the purchaser in certain circumstances, including if the purchaser fails to exercise its right to match in the context of a superior proposal supported by Dorel, has been increased to approximately C$15.6 million from approximately C$14.1 million and the termination fee payable by the purchaser if the Arrangement is not completed in certain circumstances has been increased to approximately C$26.0 million from approximately C$23.6 million. Both increases are proportionate to the 10.3% increase in the purchase price.