Dorel going private

18 November 2020 HGO Staff

MONTREAL – The founding family of Dorel Industries is poised to take the consumer goods giant private after reaching what was called a “definitive arrangement agreement” that will see them acquire all of the company’s outstanding shares following a special meeting of shareholders that is expected to be held sometime in January 2021.

Earlier this week, the company said a buyer group consisting of the family shareholders and the New York-based investment firm Cerberus Capital Management will acquire all of Dorel’s issued and outstanding Class B Subordinate Voting Shares and Class A Multiple Voting Shares for C$14.50 per share in cash.

The family shareholders include Martin Schwartz, who has been president and chief executive officer of Dorel since 1992; Jeffrey Schwartz, executive vice president and chief financial officer; Alan Schwartz, executive vice president of operations; and, Jeff Segel, executive vice president of sales and marketing. Each also sits on Dorel’s board of directors and, according to the statement announcing the deal, they control approximately 6.58 million of the outstanding shares.

According to its most recently quarterly report to the Ontario Securities Commission, there are approximately 4.2 million Class ‘A’ shares issued as well as about 28.3 million Class ‘B’ outstanding in Dorel.

The buyer group originally approached Dorel’s board of directors in December 2019 to announce their intent to purchase the company’s outstanding shares. A special committee was struck with company director Norman Steinburg as chairman.

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

“We are very pleased to partner with the family shareholders in this transaction,” commented Scott Wille, senior managing director at Cerberus. “Dorel has a long and successful history based on its entrepreneurial culture. We are excited to collaborate with Dorel’s talented and dedicated managers and employees across all three of their business segments to further accelerate growth and enhance each segment’s leadership position.”

The cash consideration to be paid to the public shareholders will be financed through a combination of cash funded by the buyer group and by Koch Equity Development and committed financing from a group of lenders.

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