Dorel Industries has completed the previously-announced sale of Dorel Sports, its bicycle segment, to Dutch mobility group Pon Holdings for $810 million, representing approximately CAD $1.03 billion.
At closing, Dorel said it received net proceeds from the sale of approximately $735 million, which it will use for payment of a special dividend of $12.00 per share. The transaction consisted of the sale by Dorel of 100% of the shares of its indirect wholly-owned subsidiary companies, comprising Dorel Sports as well as certain related assets.
“We are very pleased to have completed the sale of Dorel Sports to a great company like Pon,” said Martin Schwartz, Dorel president and CEO. “On behalf of the board of directors, I again thank the Dorel Sports team for their commitment to Dorel and their great achievements.
“We believe that with this sale, Dorel has realised full value for Dorel Sports, for the benefit of Dorel and our shareholders.”
Dorel’s board of directors has declared a special dividend of $12.00 per share on Dorel’s outstanding Class B Subordinate Voting Shares and Class A Multiple Voting Shares, representing an aggregate amount of approximately $390 million. The special dividend will be payable on 1st February to shareholders of record as at the close of business on 18th January. The full amount of the special dividend is designated as an eligible dividend for purposes of section 89(1) of the Income Tax Act (Canada).
“The declaration of the special dividend is consistent with Dorel’s commitment to return value to our shareholders,” said Schwartz. “After consulting with Dorel’s financial advisors, the board of directors has decided to use the net proceeds from the sale of Dorel Sports to pay the special dividend and to reduce Dorel’s indebtedness.
“We believe that the result will be both value for our shareholders and a stronger balance sheet for Dorel going forward.”