Premium Brands completes Stampede Culinary acquisition

Executive Summary

• Premium Brands Holdings Corp. has completed the acquisition of Stampede Culinary Partners Inc. for a total purchase price of approximately $688.0 million (U.S.).
• The transaction was financed through a combination of equity and debt issuances totaling approximately $665 million in gross proceeds, along with a draw on the company's revolving credit facility.
• The equity component involved the issuance of subscription receipts and convertible debentures, which were subsequently exchanged for common shares, with trading expected to commence on the TSX.

Key Details

• Acquisition Completion: Premium Brands Holdings Corp. successfully completed the previously announced acquisition of Stampede Culinary Partners Inc.
• Total Purchase Price: Approximately $688.0 million (U.S.), subject to customary post-closing net working capital adjustments and excluding transaction costs.
• Purchase Price Breakdown:
  • Initial Base Purchase Price: Approximately $662.5 million (U.S.), comprising:
    • $512.5 million (U.S.) in cash.
    • Issuance of $150.0 million (U.S.) of common shares (approximately 2.2 million common shares) to the seller.
  • Net Working Capital Adjustments: Approximately $10.5 million (U.S.).
  • Cash on Hand Reimbursement: Approximately $15.0 million (U.S.).
• Financing Structure:
  • Public Subscription Receipts: Issuance of 3,303,260 subscription receipts at $97.50 per receipt, generating gross proceeds of approximately $322 million.
  • Convertible Debentures: Issuance of $172.5 million aggregate principal amount of 5.50% convertible unsecured subordinated debentures at $1,000 per debenture, generating gross proceeds of $172.5 million.
  • Private Placement Subscription Receipts: Issuance of 1,743,600 subscription receipts at $97.50 per receipt, generating gross proceeds of approximately $170 million.
  • Total Gross Proceeds from Offering: Approximately $665 million.
  • Revolving Credit Facility: The balance of the base cash purchase price was financed by a draw of approximately $102 million.
• Underwriters:
  • Public Offering Syndicate: Led by CIBC Capital Markets, BMO Capital Markets, National Bank Financial Inc., Raymond James Ltd., and Scotiabank. Participants included Cormark Securities Inc., Desjardins Securities Inc., Merrill Lynch Canada Inc., RBC Dominion Securities Inc., TD Securities Inc., Canaccord Genuity Corp., Stifel Nicolaus Canada Inc., and Ventum Financial Corp.
  • Debenture Syndicate: Led by CIBC Capital Markets, BMO Capital Markets, National Bank Financial Inc., Raymond James Ltd., and Scotiabank. Participants included Canaccord Genuity Corp., Desjardins Securities Inc., RBC Dominion Securities Inc., and TD Securities Inc.
  • Private Placement: CIBC Capital Markets acted as sole bookrunner and agent.
• Share Exchange and Trading:
  • Each outstanding subscription receipt was exchanged for one share without additional consideration, resulting in the issuance of 5,046,860 shares.
  • Shares issued from placement subscription receipts are subject to a four-month hold period under Canadian securities laws.
  • Subscription receipts are expected to be halted from trading and delisted from the TSX at the close of markets, with the newly issued shares commencing trading immediately.

Notable Quotes

• None provided in the text.