Roots Corporation has priced its proposed initial public offering (IPO) by way of secondary offering. The company will issue 16,667,000 common shares at $12 per share for gross proceeds of $200 million. Roots has previously planned to issue shares at $14-16 per share.
Searchlight Capital Partners, L.P., through Searchlight Capital II PV, L.P., SC II TMK, L.P. and Searchlight TMK Co-Invest Partners, L.P., and Don Michael Investments Inc., an entity indirectly controlled by Roots founders, Michael Budman and Don Green and certain of their family members, will sell 13,316,482 and 3,350,518 shares respectively.
Searchlight Capital Partners and Don Michael Investments have granted underwriters an over-allotment option for additional 15% of the number of shares being offering for gross proceeds of $30 million.
The offering is expected to close on October 25, 2017. Toronto Stock Exchange (TSX) has conditionally approved the listing of Roots shares under the symbol “ROOT”.
Following completion of the offering, Searchlight will beneficially own (i) 20,010,887 shares, representing approximately 47.7% of the outstanding shares (or approximately 44.2% on a fully-diluted basis), or (ii) if the over-allotment option is exercised in full, 18,013,414 Shares, representing approximately 42.9% of the outstanding Shares (or approximately 39.8% on a fully-diluted basis). Don Michael Investments will beneficially own (i) 5,034,872 shares, representing approximately 12.0% of the outstanding shares (or approximately 11.1% on a fully-diluted basis), or (ii) if the over-allotment option is exercised in full, 4,532,295 Shares, representing approximately 10.8% of the outstanding shares (or approximately 10.0% on a fully-diluted basis).
The offering is being co-led by TD Securities Inc., Credit Suisse Securities (Canada), Inc. and BMO Capital Markets, together with Jefferies Securities, Inc., RBC Dominion Securities Inc. and Scotia Capital Inc., as joint bookrunners, and CIBC World Markets Inc., Canaccord Genuity Corp. and National Bank Financial Inc., as underwriters.
Torys LLP and Osler, Hoskin & Harcourt LLP act as legal counsels to Roots and the underwriters respectively.
photo credit: Roots