contact HGO      +1 613.475.4704

 Home / Article: Dorel going private, Schwartz family strikes deal with U.S. group

Dorel going private, Schwartz family strikes deal with U.S. group

 2 November 2020     Michael J. Knell 

MONTREAL – Dorel Industries announced earlier today an agreement-in-principle has been reached by a group that includes a New York City-based investment firm and the company’s senior executive team to take the consumer goods giant private.

In a statement, the publicly-held Dorel said the buyer group includes affiliates of Cerberus Capital Management as well as Martin Schwartz, Jeffrey Schwartz, Alan Schwartz and Jeff Segel – who were collectively called the ‘family shareholders’ – who have submitted a non-binding proposal to acquire all of the company’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 C$14.50 per share.

Dorel has granted the buyer group exclusivity through November 10 to complete negotiations and enter into a definitive transaction agreement.

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, who they told of their intent to seek a partner and take the company private this past December.

The proposal price of C$14.50 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, a 19% premium to the 60-day volume weighted average trading price (“VWAP”) and a 7% premium to the 30-day VWAP of Dorel’s Class B Subordinate Voting Shares on the TSX.

The ‘family shareholders’ currently own or control an aggregate of 3,999,960 Class ‘A’ and 2,231,639 Class ‘B’ share, representing approximately 19.2% of Dorel’s outstanding shares on an economic basis and 60.2% on a voting basis. They have also informed the board they are not interested in any alternative transaction, including the sale of their interest in Dorel or the sale of any of Dorel’s businesses segments or material assets.

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. If the transaction closes at the price of C$14.50 per share, the deal should be worth about C$380.7 million. Negotiations with non-family shareholders will continue until November 10.

For the first half of 2020, Dorel reported revenue of US$1.3 billion, essentially unchanged from the same period last year. It also recorded a net loss was US$46.7 million or US$1.44 per diluted share, somewhat steeper than the loss of US$5.5 million or US$0.17 per diluted share a year ago.

Dorel Industries operates three distinct businesses in juvenile products, bicycles and home products. Dorel Juvenile’s branded products include Maxi- Cosi, Quinny and Tiny Love, complemented by regional brands such as Safety 1st, Bébé Confort, Cosco and Infanti. Dorel Sports brands include Cannondale, Schwinn, GT, Mongoose, Caloi and IronHorse. Dorel Home, with its comprehensive e-commerce platform, markets a wide assortment of domestically produced and imported furniture.

The company employs approximately 8,000 people in facilities located in 25 countries worldwide.

Related Story: Dorel signs deal to make Queer Eye furniture collection


PayBright
Cocoon by Sealy
This HGO article was written by:
Michael J. Knell
Michael J. Knell

Michael is the publisher and editor of Home Goods Online. A seasoned business journalist, he has researched and written about the furniture, mattress and major appliance industries in both Canada and the United States for the past three decades.


The HGO Merchandiser
Summer 2020
Summer 2020
Winter 2020
Winter 2020
Summer 2019
Summer 2019
Spring 2019
Spring 2019

 View all editions of The HGO Merchandiser.

  About HGO

Home Goods Online.ca and its accompanying newsletter - HGO This Week - covers the furniture, bedding, appliances, consumer electronics, accessories, lamps and lighting and floor coverings product sectors of the big ticket home goods market in Canada. HGO is also a forum for the dissemination of market research and hard-hitting articles on best practices for Canadian retailers.

  Contact Us
  Home Goods Online

Published by:
Windsor Bay Communications Inc.
P.O. Box 3023; 120 Ontario Street,
Brighton ON Canada K0K 1H0

Tel : 613.475.4704

Fax : 613.475.0829
Mail : contact us