Aritzia Inc (TSX: ATZ), a Vancouver-based women’s fashion brand, said U.S. private equity firm Berkshire Partners and another investor will sell subordinate voting shares for $16.55 per unit.
The secondary offering is expected to generate proceeds of more than $100 million or more than $115 million if the greenshoe option is exercised in full.
Upon completion of the offering, and assuming no exercise of the greenshoe option, Berkshire will hold about 22.4 percent of issued and outstanding shares and about 45.1 percent of the voting power attached to all of the shares.
Aritzia went public in 2016, raising $460 million. Berkshire acquired the company in 2005.
Aritzia Announces $100 Million Secondary Offering of Subordinate Voting Shares
Aritzia Inc. (TSX:ATZ) (“Aritzia”), a vertically integrated fashion brand, announced today that an investment vehicle managed by Berkshire Partners LLC, a Boston-based private equity firm (the “Berkshire Shareholder”) and Sweet Park Holdings Inc., an entity indirectly controlled by Aldo Bensadoun, a director of Aritzia (the “Bensadoun Shareholder” and together with the Berkshire Shareholder, the “Selling Shareholders”), entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets and RBC Capital Markets (the “Underwriters”), pursuant to which the Underwriters have agreed to purchase on a bought deal basis an aggregate of 6,050,000 subordinate voting shares held by the Selling Shareholders at an offering price of $16.55 per share (the “Offering Price”) for total gross proceeds to the Selling Shareholders of $100,127,500 (the “Offering”). Aritzia will not receive any proceeds from the Offering.
The Underwriters have also been granted an over-allotment option (the “Over-Allotment Option”) to purchase up to an additional 907,500 subordinate voting shares from the Berkshire Shareholder at the Offering Price for additional gross proceeds of $15,019,125 if the Over-Allotment Option is exercised in full. The Over-Allotment Option can be exercised at any time, in whole or in part, for a period of 30 days from the closing date of the Offering, which is expected to occur on or about August 7, 2018 and is subject to certain customary closing conditions.
A preliminary short form prospectus relating to the Offering will be filed by no later than July 23, 2018 with Canadian securities regulating authorities.
Upon completion of the Offering and assuming no exercise of the Over-Allotment Option, the Berkshire Shareholder and its affiliates will, directly or indirectly, own or control approximately 22.4% of the issued and outstanding subordinate voting shares and multiple voting shares (collectively, the “Shares”) and approximately 45.1% of the voting power attached to all of the Shares. Upon completion of the Offering, there will be 62,998,126 subordinate voting shares issued and outstanding and 49,876,002 multiple voting shares issued and outstanding (63,905,626 subordinate voting shares and 48,968,502 multiple voting shares if the Over-Allotment Option is exercised in full).
Pursuant to a second amended and restated registration rights agreement dated October 3, 2016 between, inter alios, the Company, CanLux AB Investments One S.à r.l. (as predecessor in interest to the Berkshire Shareholder) and the Bensadoun Shareholder, certain shareholders of the Company have the right to elect to participate in the Offering. To the extent any of these shareholders elect to participate in the Offering, the number of subordinate voting shares to be sold by the Berkshire Shareholder will correspondingly be reduced.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The subordinate voting shares have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. Accordingly, the subordinate voting shares may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Aritzia in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Aritzia is a vertically integrated fashion brand. The Company designs apparel and accessories for its collection of exclusive brands. The Company’s expansive and diverse range of women’s fashion apparel and accessories addresses a broad range of style preferences and lifestyle requirements. Aritzia is well known and deeply loved by its customers in Canada with growing customer awareness and affinity in the United States and outside of North America. Aritzia aims to delight its customers through an aspirational shopping experience and exceptional customer service that extends across its more than 85 retail stores and eCommerce business, aritzia.com.
About Berkshire Partners
Berkshire Partners, a Boston-based investment firm, has made over 115 investments since its founding in 1986 through nine private equity funds with more than $16 billion in aggregate capital. Berkshire has developed industry experience in several areas including consumer and retail, communications, business services, industrials and healthcare. Berkshire has a long history of partnering with management teams to build market leading growth companies. Prior investments in the retail sector include Bare Escentuals, Carter’s and Party City.
Jean Fontana, ICR, Inc., 646-277-1214, Jean.Fontana@icrinc.com