Savaria, whose market capitalization is close to one billion dollars, is issuing $80 million in new shares, an operation that will give more financial flexibility to the Laval company specializing in accessibility for people with reduced mobility.
Savaria announced Wednesday night the issuance and sale of 5.5 million shares. The deal is being completed at an issue price of $14.50, the equivalent of a 6% discount to the company’s stock price as of market close on Wednesday.
Savaria’s stock closed Wednesday’s session at $15.41 on the Toronto Stock Exchange.
A syndicate of underwriters led by National Bank Financial and co-led by Desjardins Securities, Scotiabank and TD Securities purchases 3.8 million of the 5.5 million shares newly issued by Savaria.
The rest is bought by the Caisse de depot et placement du Québec, which frees up $25 million for Savaria.
The management of the Caisse de dépôt et placement says it reiterates its support for Savaria, which it describes as “a world leader in the accessibility industry”, in order to facilitate the expansion of the company and its projects in long term.
Savaria executives explain that the 80 million collected in the operation will be used in particular to reduce the debt in order to give the company more flexibility for the financing of its growth projects.
The big boss of Savaria, Marcel Bourassa, as well as his children Sébastien, Alexandre and Marie-Pierre, all active in the company, and his brother Jean-Marie Bourassa, member of the board of directors, have committed to participate in the transaction by purchasing, collectively, $3.5 million worth of shares, i.e. 4.4% of the shares to be issued.
If investor appetite is there, Savaria could raise up to an additional $12 million and bring the total value of the share issue to more than $92 million. Savaria has agreed to grant the Caisse de dépôt and the banking syndicate an over-allotment option to purchase hundreds of thousands of additional shares over the coming weeks.
Savaria’s stock is down 13% since peaking at $17.70 in mid-July. They are eight analysts to follow the activities of Savaria and they all recommend the purchase of the title.
Savaria notably manufactures and installs vertical and inclined lifting platforms and residential and commercial elevators. The company also markets medical equipment, such as beds for long-term care, and also converts and adapts vehicles for personal and commercial purposes.
Savaria employs approximately 2,250 people and has factories in Canada, the United States, Mexico, Europe and China.