Montreal-based manufacturer Dorel Industries Inc. has reached an agreement in principle that will see the TSX-listed company taken private by a group led by Cerberus Capital Management and the family that controls the company’s multiple-voting shares.
Under the proposal, the buyers group, which includes the Schwartz family that founded the company in the 1960’s, will pay $14.50 per share for any shares they do not already hold. That values the company at just shy of $500 million.
That values the company about where it was on Friday, when it closed at $14.39 a share. But that comes after a long run since March, when the company bottomed out below $1.50 a share during the depths of COVID-19.
The Schwartz family currently owns about 6 million shares or 20 per cent of the company, but they control 60 per cent of the company’s votes.
The shares were trading hands at over $15 a share when the TSX opened on Monday, above the takeover offers and a sign that investors think an even better offer could be coming.
The deal is seeking to buy all outstanding shares of the company that they do not already own. The family said in a release that they are not interested in any other possible transactions, including being bought out themselves, or selling off any assets.
The family first hinted it was interested in finding a partner to help them take the company private back in December 2019.
“Dorel has granted the buyer group exclusivity through Nov 10, 2020, to complete negotiations and enter into a definitive transaction agreement between Dorel and the buyer group,” the company said before markets opened,” Dorel said before stock markets opened on Monday.
The company manufactures a variety of products primarily aimed at children and families, including bicycles under the Cannondale, Schwinn, GT, Mongoose, Caloi and IronHorse brands.
They also make products such as car seats under the Maxi-Cosi, Quinny, Tiny Love, Safety 1st, Bébé Confort, Cosco and Infanti brand names.
The company has about 8,000 employees with operations in 25 countries, and booked about $2.6 billion in sales last year.