Private Placement Cara Operations Limited (TSX:CAO) ("Cara" or the "Company") announced today that it has entered into an agreement with a syndicate of agents (the "Agents") led by Scotia Capital Inc. (acting as sole bookrunner) and including BMO Nesbitt Burns Inc. and RBC Dominion Securities Inc. to sell 7,863,280 subscription receipts ("Subscription Receipts") on a private placement basis (the "Offering"). The Subscription Receipts will be sold at a price of $29.25 per Subscription Receipt, for gross proceeds to the Company of $230,000,940.
The net proceeds from the Offering will be used to finance, in part, the purchase price under the Company's previously announced agreement to acquire 100% of Groupe St-Hubert Inc. (the "Acquisition"), Qubec's leading full-service restaurant operator as well as a fully-integrated food manufacturer, for $537 million. The Acquisition will add a major iconic brand to Cara's portfolio and provide Cara with, among other things, 117 restaurants generating System Sales of approximately $403 million, two Qubec-based food manufacturing plants and two distribution centres generating sales of $225 million and a valuable real estate portfolio. The Acquisition is expected to close in the summer of 2016. Additional details concerning the Acquisition are included in Cara's material change report dated April 4, 2016, filed with the Canadian securities regulatory authorities and available on the Company's SEDAR profile at www.sedar.com. Presentation slides including additional information about the Acquisition are available on Cara's website located at www.cara.com.
Each Subscription Receipt represents the right of the holder to receive, upon closing of the Acquisition and without payment of additional consideration, one subordinate voting share of Cara (a "Subordinate Voting Share") plus an amount per Subordinate Voting Share equal to the amount per Subordinate Voting Share of any dividends for which record dates have occurred during the period from the closing date of the Offering to the date immediately preceding the closing of the Acquisition, less applicable withholding taxes. Closing of the Offering is expected to occur by April 15, 2016, subject to receipt of all required approvals for the Offering, including customary TSX approval. The net proceeds from the Offering will be held in escrow pending the closing of the Acquisition.
As part of the Offering, Fairfax Financial Holdings Limited and its affiliates have agreed to purchase 3,487,180 Subscription Receipts, accounting for approximately $102 million of the total $230 million offering size.
Following the completion of the Acquisition and after giving effect to the Offering, the Company's pro forma net debt to Operating EBITDA ratio (adjusted for the full year contribution of New York Fries and the Acquisition as if completed on December 31, 2014) is expected to be approximately 2.0x, providing Cara with significant financial flexibility to continue its growth strategy.
Read more at https://www.stockhouse.com/news/press-releases/2016/04/06/cara-announces-230-million-private-placement-of-subscription-receipts#RY48o5d42K7pT1Xw.99