Pinnacle Renewable final prices $150M IPO and secondary offering – update

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By Ted Liu

Pinnacle Renewable Holdings Inc., a portfolio company of ONCAP, has filed its final prospectus in connection with its proposed initial public offering (IPO) and secondary offering.

Pinnacle Renewables will issue 13,335,000 common shares, 6,223,889 common shares from treasury and 7,111,111 common shares by selling shareholders, priced at $11.25 per share for aggregate gross proceeds of $150 million, with $70 million going to the company and $80 million to the selling shareholders.

Pinnacle Renewable had previously planned to issue shares between $13-15 per share for gross proceeds of $150 million.

ONCAP entities including 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. will not be selling any shares as part of the secondary offering as previously planned.

The selling shareholders are now Rob Swaan Holdings Inc., Jim Swaan Holdings Inc., Beckman Holdings Inc., Leroy Reitsma, Lodge Family Trust and Rick Davis.

Certain of the selling shareholders has granted the underwriter an over-allotment option to purchase up to 2,000,250 common shares for additional gross proceeds of $22.5 million to the selling shareholders if the option is exercised in full.

Following the closing of the offering, ONCAP Entities will control approximately 42.9% of the issued and outstanding common shares.

The offering is being co-led by CIBC Capital Markets and RBC Capital Markets, and including 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.

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

The closing of the offering is expected to occur on February 6, 2018, at which time the common shares will commence trading on the Toronto Stock Exchange (TSX) under the symbol “PL”.

Pinnacle is a rapidly growing industrial wood pellet manufacturer and distributor and the third largest producer in the world. It produces renewable fuel for electricity generation in the form of industrial wood pellets, which are used by global utilities and large-scale power generators to produce renewable and reliable baseload power. The company operates six industrial wood pellet production facilities, a port terminal, and has new production facilities under development in Entwistle, Alberta and Smithers, B.C.

Update: Pinnacle Renewable Holdings completed $150M offering on February 6, 2108. Its stock opened on TSX at $10.72 and closed at $12.11 on February 6, 2018.

photo credit: Pinnacle Renewable