Bombardier Announces Signature of Sale and Purchase
Agreement for Recreational Products Business
MONTREAL, QUEBEC--DECEMBER 3, 2003 - 09:26 ET
Bombardier Inc. announced today that it has
signed a sale and purchase agreement for its recreational
products segment with Bombardier Recreational Products Inc., a
corporation formed by Bain Capital, members of the Bombardier
family and the Caisse de depot et placement du Quebec.
On Aug. 27, 2003, Bombardier announced that it had reached an
agreement in principle to sell its recreational products business
for an aggregate purchase price of $1,225 million, subject to
certain price adjustments, for a net purchase price of $1,075
million.
As a result of further negotiations between the Corporation and
the Purchaser, the net purchase price has been reduced by an
amount of $115 million, primarily due to the continued
appreciation of the Canadian dollar relative to the U.S. dollar
which adversely affects the value of the recreational products
business. Consequently, the revised net purchase price stipulated
in the agreement is $960 million, of which $910 million will be
paid in cash and $50 million will be paid by the issuance of
preferred shares of the Purchaser's parent company.
As is customary for such transactions, cash proceeds will be
impacted at closing by adjustments for variation in working
capital, pension plan funding and other off balance sheet items.
These are currently estimated to be in the range of $160 million
in favor of the purchaser.
The transaction is expected to close during the current fiscal
year and is subject to the completion of the Purchaser's
committed financing, obtaining the consent of governmental
authorities and fulfilment of other customary conditions.
"With the signature of this agreement, our recapitalization
program is now all but complete," said Paul M. Tellier, President
and Chief Executive Officer of Bombardier Inc. "The price
adjustment is acceptable given the currency fluctuations which
occured since we entered into the initial agreement to sell the
recreational products segment. Bombardier Inc. can now focus on
its aerospace and transportation operations."
In connection with the sale, the Corporation and the Purchaser
will enter into certain other agreements, including a trademark
license agreement under which Bombardier will license to the
Purchaser certain trademarks which will continue to be owned by
Bombardier. In addition, certain floor plan and other financing
arrangements will be entered into by the Purchaser with
Bombardier Capital.
Bombardier's Board of Directors approved the definitive agreement
following a recommendation by the independent committee chaired
by L. Denis Desautels. The committee was created to supervise the
sale process for the recreational products business and review
the related party transaction. In reaching its decision, the
Board received fairness opinions confirming the fairness of the
consideration for the transaction from its own financial advisor,
UBS, and from Morgan Stanley, financial advisor to the
independent committee. Directors of Bombardier who are members of
the Bombardier family abstained from participating in Board
meetings in which the transaction was considered and did not vote
on the transaction.
Bombardier Recreational Products designs, develops, builds,
distributes and markets Sea-Doo(R) watercraft and sport boats,
Ski-Doo(R) and Lynx(R) snowmobiles, Johnson(R) and Evinrude(R)
outboard engines, Evinrude direct injection and Evinrude
E-TEC(TM) technologies, Bombardier(i) ATVs, Rotax(TM) engines and
karts, as well as utility vehicles.
Bombardier Inc., a diversified manufacturing and services
company, is a world-leading manufacturer of business jets,
regional aircraft, rail transportation equipment and motorized
recreational products. It also provides financial services and
asset management in business areas aligned with its core
expertise. Headquartered in Montreal, Canada, the Corporation has
a workforce of some 75,000 people and manufacturing facilities in
25 countries throughout the Americas, Europe and Asia-Pacific.
Its revenues for the fiscal year ended Jan. 31, 2003 stood at
$23.7 billion Cdn. Bombardier shares are traded on the Toronto,
Brussels and Frankfurt stock exchanges (BBD, BOM and BBDd.F).
(i),(R),(TM) Trademarks of Bombardier Inc. or its subsidiaries. |
