Bauer Performance Sports Ltd. announced that Kohlberg Management VI, LLC, Bauer's significant shareholder, plans to sell stock in a secondary offering.
Funds advised or managed by Kohlberg Management VI, LLC have entered into an agreement with a syndicate of underwriters led by RBC Capital Markets and Paradigm Capital Inc. on an equal partner basis, for a secondary offering, on a bought deal basis, of 3,600,000 common shares of the company at an offering price of C$9.90 per common share.
In addition, the syndicate has been granted an over-allotment option by the Kohlberg Funds, exercisable for a period of 30 days from closing, to purchase up to an additional 540,000 common shares. Bauer will not receive any proceeds from the secondary offering.
Pursuant to a registration rights agreement executed between the Kohlberg Funds and other shareholders of Bauer prior to its initial public offering, certain other shareholders of Bauer that held shares prior to the initial public offering have the right to elect to participate in the secondary offering. To the extent any of these shareholders elect to participate in the secondary offering, the number of common shares to be sold by the Kohlberg Funds will correspondingly be reduced. The Kohlberg Funds currently own an equivalent of 53.0 percent of the issued and outstanding common stock of Bauer on a non-diluted basis. Assuming no other shareholders elect to participate in the secondary offering but before giving effect to the over-allotment option, the ownership interest of the Kohlberg Funds will, upon completion of the secondary offering, be reduced to approximately 42.6 percent.
Closing of the offering is expected to occur on or about October 17, 2012 and is subject to certain conditions, including the approval of the Canadian securities regulatory authorities.