Bedrock Industries to sell C$191m in Stelco Holdings shares

Bedrock Industries, an affiliate of Lindsay Goldberg, has agreed to sell common shares in Hamilton, Ontario-based steelmaker Stelco Holdings to BMO Capital Markets.

Bedrock Industries, an affiliate of Lindsay Goldberg, has agreed to sell common shares in Hamilton, Ontario-based steelmaker Stelco Holdings to BMO Capital Markets. The secondary deal, expected to close this week, will generate gross proceeds of C$191.4 million. Once closed, Bedrock will hold about 22.5 percent of Stelco’s the issued and outstanding shares.

PRESS RELEASE

Hamilton, Ontario (May 26, 2021) – Stelco Holdings Inc. (“Stelco” or the “Company”) (TSX: STLC) and LG Bedrock Holdings LP (the “Selling Shareholder”) have announced today that BMO Capital Markets (the “Underwriter”) has agreed to buy from the Selling Shareholder on a bought deal basis 5,800,000 common shares of the Company (“Common Shares”), at a price of C$33.00 per Common Share for gross proceeds of C$191,400,000 to the Selling Shareholder (the “Offering”). The Selling Shareholder has granted the Underwriter an option, exercisable at the same price for a period of 30 days following the closing of the Offering, to purchase up to an additional 15% of the Offering to cover the Underwriter’s over-allocation position, if any, and consequent market stabilization. The Offering is expected to close on or about June 2, 2021 and is subject to certain conditions, including receipt of all necessary regulatory approvals.

Immediately prior to the Offering, Bedrock Industries Coöperatief U.A. (“Bedrock Industries”) held 34,172,315 Common Shares, representing approximately 38.5% of the issued and outstanding Common Shares. Concurrent with the Offering, Bedrock Industries will distribute in kind all of its Common Shares, including the Common Shares comprising part of the Offering, indirectly to the Selling Shareholder and Alan Kestenbaum (or entities beneficially owned by, or under the control or direction of, or other family members not under the control of Alan Kestenbaum). Following the closing of the Offering (assuming no exercise of the over-allotment option), the Selling Shareholder will hold 19,952,236 Common Shares, representing approximately 22.5% of the issued and outstanding Common Shares and Alan Kestenbaum will, directly or indirectly, beneficially own, or have control or direction over, 11,601,651 Common Shares, representing approximately 13.1% of the issued and outstanding Common Shares.

The net proceeds of the Offering will be paid directly to the Selling Shareholder. Neither the Company nor Alan Kestenbaum will receive any proceeds from the Offering.

The Common Shares will be offered in each of the provinces and territories of Canada pursuant to the Company’s base shelf prospectus dated February 11, 2021 and may also be offered by way of private placement in the United States. The terms of the Offering will be described in a prospectus supplement to be filed with Canadian securities regulators. The Underwriter is waiving a lock-up restriction with respect to the Common Shares previously held by Bedrock Industries to be sold in the Offering.

The Common Shares have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Stelco
Stelco is a low cost, integrated and independent steelmaker with one of the newest and most technologically advanced integrated steelmaking facilities in North America. In addition to being North America’s only integrated producer of pig iron, Stelco produces flat-rolled value-added steels, including premium-quality coated, cold-rolled and hot-rolled steel products. With first-rate gauge, crown, and shape control, as well as reliable uniformity of mechanical properties, our steel products are supplied to customers in the construction, automotive and energy industries across Canada and the United States as well as to a variety of steel service centres, which are regional distributors of steel products. At Stelco, we understand the importance of our business reflecting the communities we serve and are committed to diversity and inclusion as a core part of our workplace culture, in part, through active participation in the BlackNorth Initiative.