Power Corp‘s Sagard Capital Partners has entered into a confidentiality agreement with the private equity group of Brookfield Asset Managment relating to Performance Sports Group Ltd (NYSE, TSX: PSG), a U.S. maker of sports equipment and apparel. Sagard said it and Brookfield are discussing a possible PSG tranasction, such as a restructuring deal, equity issuance or debt refinancing. Sagard previously announced it held talks of a similar nature with Fairfax Financial. Sagard currently owns about 16.9 percent of PSG shares, while Brookfield owns about 13.2 percent. Exeter, New Hampshire’s PSG is reportedly contending with debt and financial concerns.
Sagard Capital Announces Developments Concerning Holdings in Performance Sports Group Ltd.
NEW YORK, Oct. 27, 2016 /CNW/ – Sagard Capital Partners, L.P. and certain of its affiliates (collectively, “Sagard Capital”) announce that Sagard Capital and Brookfield Capital Partners Ltd. (“Brookfield”) have entered into a confidentiality agreement relating to the Issuer and its confidential information, as required by Sagard’s existing confidentiality agreement with Performance Sports Group Ltd. (the “Issuer”), and any other confidential information provided by or on behalf of Sagard Capital to Brookfield.
As previously announced, Sagard Capital and the Issuer, and their respective advisors, have discussed the possibility of Sagard Capital, and potentially one or more co-investors (including Fairfax Financial Holdings Limited (“Fairfax”) as described below) partnering with Sagard Capital, proposing potential plans or proposals that may involve one or more of the following related to the Issuer (each, a “Potential Transaction”): restructurings; possible issuances by the Issuer of additional and/or refinancing indebtedness; the acquisition of indebtedness of the Issuer or its subsidiaries; and/or other strategic alternatives. Any such plans or proposals may be directed to or discussed with the Issuer, its advisors, its securityholders and/or its lenders, with advisors to Sagard Capital and/or with potential sources of financing and co-investors for any of the foregoing, among others. Sagard Capital and their advisors have also conducted, and continue to conduct, a due diligence review of the Issuer and its subsidiaries. Sagard Capital presently expects to continue discussions with additional potential sources of financing and/or co-investors for any Potential Transaction, and with the Issuer related to a possible Potential Transaction.
Sagard Capital and Brookfield and their respective representatives may discuss the possibility of Sagard Capital and Brookfield, and/or one or more entities to be formed at the direction of Sagard Capital, acting together with respect to potential plans or proposals related to a Potential Transaction. Sagard Capital and Brookfield have not yet entered into any agreements, term sheets, or other arrangements among themselves with respect to any joint activity and it is presently uncertain whether Sagard and Brookfield, and/or an entity formed thereby, on the one hand, and the Issuer, on the other hand, will agree to any definitive agreement with respect to any Potential Transaction, or that any Potential Transaction will occur.
As previously announced, Sagard has also entered into a confidentiality agreement with Fairfax relating to the Issuer and its confidential information, as required by Sagard’s existing confidentiality agreement with the Issuer, and any other confidential information provided by or on behalf of Sagard to Fairfax. Sagard Capital, Fairfax and their respective representatives have discussed the possibility of Sagard Capital and Fairfax, and/or one or more entities to be formed at their direction, acting together with respect to potential plans or proposals related to a Potential Transaction. Fairfax and/or its representatives have participated with Sagard Capital and/or their representatives in discussions with the Issuer regarding such matters.
Sagard Capital and Fairfax have not yet entered into any agreements, term sheets, or other arrangements among themselves with respect to any joint activity. However, based on discussions to date, Sagard Capital has concluded that it is likely that, if they proceed with a plan or proposal to effect any Potential Transaction, they will proceed with Fairfax and/or one of its affiliates. It is possible that, depending on discussions with Brookfield, Brookfield may be an additional participant in such a plan or proposal submitted by Sagard Capital (and Fairfax, if applicable).
There can be no assurance that Sagard Capital will submit a plan or proposal with respect to any of the foregoing, that Sagard Capital or any other person (including the Issuer, Fairfax, Brookfield and/or an entity formed thereby) will agree to any definitive agreement with respect to any of the foregoing, or that any of the foregoing (including a Potential Transaction) will occur. Nothing contained herein shall be deemed to constitute an offer to sell or purchase or the solicitation of an offer to sell or purchase any securities, nor shall there be any purchase or sale of any securities in any province, country, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, country, state or jurisdiction.
Sagard Capital further discloses that it continues to beneficially own and control an aggregate of 7,721,599 common shares of the Issuer (“Shares”), representing approximately 16.9% of the issued and outstanding Shares. Fairfax has informed Sagard Capital that Fairfax does not have ownership or control over any Shares as of the date hereof. Brookfield has informed Sagard Capital that 251091708 Delaware LP, a Delaware limited partnership indirectly controlled by Brookfield, has ownership and control over 6,026,860 Shares of the Issuer, representing approximately 13.23% of the issued and outstanding Shares.
Sagard Capital, a subsidiary of Power Corporation of Canada, is relying on Part 5 of National Instrument 62-103 in respect of aggregation relief relating to any securities that may be held by Great-West Lifeco Inc. and its subsidiaries, IGM Financial Inc. and its subsidiaries, and any investment fund managed by entities within the Power Corporation of Canada group of companies.
The Issuer’s head office is located at 100 Domain Drive, Exeter, New Hampshire, U.S.A., 03833.
About Sagard Capital
Sagard Capital Partners, L.P., Sagard Capital Partners GP, Inc., Sagard Capital Partners Management Corp., Sagard Holdings, Inc. and 9938982 Canada Inc. issue this press release pursuant to applicable requirements of Canadian securities legislation.
Sagard Capital Partners, L.P. is the direct owner of the Shares reported herein as being beneficially owned and over which control is shared by the entities comprising Sagard Capital. Sagard Capital Partners, L.P. is principally engaged in the business of investing in securities. Sagard Capital Partners GP, Inc. is the general partner of Sagard Capital Partners, L.P. Sagard Capital Partners Management Corp. is the investment manager of Sagard Capital Partners, L.P. Sagard Holdings, Inc. is a limited partner of Sagard Capital Partners, L.P. and the sole stockholder of Sagard Capital Partners Management Corp. 9938982 Canada Inc. is a wholly-owned subsidiary of Sagard Holdings, Inc. Each entity comprising Sagard Capital is a subsidiary of Power Corporation of Canada, in which a controlling voting interest is held by The Desmarais Family Residuary Trust.
For each of Sagard Capital Partners, L.P., Sagard Capital Partners GP, Inc. and Sagard Capital Partners Management Corp., the principal business address, which also serves as the principal office, is 280 Park Avenue, 3rd Floor West, New York, New York, 10017. For Sagard Holdings, Inc., the principal business address, which also serves as the principal office, is 751 Victoria Square, Montréal, Québec, H2Y 2J3. For 9938982 Canada Inc., the principal business address, which also serves as the principal office, is 161 Bay Street, Suite 5000, Toronto, Ontario, M5J 2S1.
Sagard Capital’s strategy is to acquire significant minority or control positions in publicly traded small and mid-sized companies. It offers a unique and highly differentiated value proposition to companies looking for supportive, long-term shareholders. Based in New York, New York, Sagard Capital is an evergreen fund with an indefinite holding period for its investments. Sagard Capital is purpose-built to be an independent, flexible, supportive partner to management teams focused on building sustainable, leading businesses and generating long-term shareholder value.
In connection with the above, Sagard Capital has filed an early warning report, which updates an earlier report of Sagard Capital dated October 24, 2016, on the System for Electronic Document Analysis and Retrieval (SEDAR).
For further information: or to obtain a copy of the early warning report filed by Sagard Capital in connection with the above, which is also available on www.sedar.com, please contact: Samuel Robinson, President, 280 Park Ave., 3rd Floor West, New York, NY, U.S.A. 10017, (203) 629-6700
Photo courtesy of Reuters/Vasily Fedosenko