ONCAP backed Pinnacle Renewable prices $175M IPO and secondary offering

Pinnacle Renewable Holdings Inc. has filed an amendment to its preliminary prospectus for the proposed initial public offering (IPO) and secondary offering of common shares.

Pinnacle Renewable intends to issue shares between $13.00 and $15.00 per share for gross proceeds of $175 million, $70 million from treasury offering and $105 million to the selling shareholders, or $131.25 million to selling shareholder if the over-allotment option granted the selling shareholders is exercised in full.

The selling shareholders include ONCAP II L.P., ONCAP US (II) L.P., ONCAP (US) II-A L.P., ONEX Parallel Investment (ONCAP) L.P. and Biomass EI Ltd. (ONCAP Entities) and Rob Swaan Holdings Inc., Jim Swaan Holdings Inc., Beckman Holdings Inc., Leroy Reitsma, Lodge Family Trust, and Rick Davis.

Upon completion of the offering, there will be 31,682,508 common shares issued and outstanding.

ONCAP Entities currently control 14,418,721 common shares. Upon completion of the offering, the ONCAP Entities will own 11,746,520 shares representing 37.1% of the issued and outstanding shares or 33.1% if the over-allotment option is exercised in full.

CIBC Capital Markets and RBC Capital Markets co-lead the offering with BMO Nesbitt Burns Inc. and Scotia Capital Inc., as joint bookrunners, and National Bank Financial Inc., GMP Securities L.P., Raymond James Ltd. and HSBC Securities (Canada) Inc., making up the underwriting syndicate.

Stikeman Elliott LLP and McCarthy Tétrault LLP are acting as legal counsel to Pinnacle and the underwriters respectively.

Pinnacle Renewable Holdings intends to apply to list its shares on the Toronto Stock Exchange (TSX).

Richmond, BC based Pinnacle Renewable is a rapidly growing industrial wood pellet manufacturer and distributor and the third largest producer in the world. The company operates six industrial wood pellet production facilities, a port terminal, and have new production facilities under development in Entwistle, Alberta and Smithers, B.C.

Founded in 1989 by Jim and Rob Swaan with the support of Doug Beckman (Founders), Pinnacle was one of the first wood pellet producers in the industry. In October 2007, Leroy Reitsma joined Pinnacle as Senior Vice President and in 2011, Pinnacle Founders and Leroy Reitsma partnered with ONCAP.

photo credit: Pinnacle Renewable

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.