Amer Sports, Inc. Announces Launch of Proposed Senior Secured Notes Offering

Rhea-AI Summary

Amer Sports, Inc. has announced a private offering of $600 million aggregate principal amount of new senior secured notes due 2031, along with a new credit agreement and new senior secured credit facilities. The net proceeds from the offering and credit facilities will be used to repay outstanding indebtedness and for general corporate purposes. The offering is subject to market and other conditions, and the Notes will not be registered under the Securities Act.

Insights

Financial Analyst

The announcement by Amer Sports regarding the launch of a $600 million offering of senior secured notes and the concurrent structuring of new credit facilities is a significant financial move that merits close scrutiny. From a financial perspective, this strategic refinancing could potentially lower the company's cost of capital if the new debt carries a lower interest rate than the existing obligations. It's also indicative of the company's creditworthiness and management's confidence in future cash flows, as they are able to secure substantial new financing.

Furthermore, the repayment and termination of existing credit facilities with the proceeds from this offering suggest a simplification of the company's debt structure, which could improve financial flexibility. However, investors should be mindful of the leverage levels post-transaction, as an increase in debt could affect the company's risk profile. The senior secured nature of the notes and credit facilities means that these lenders will have a priority claim over the company's assets in case of default, which is an important consideration for both debt and equity investors.

Legal Expert

The legal aspects of Amer Sports' private offering and the establishment of new credit facilities are critical to understanding the potential implications for investors. The offering's exemption from the registration requirements under the Securities Act of 1933, as amended and its limitation to qualified institutional buyers and non-U.S. persons, is a common approach for companies looking to raise capital quickly without the additional time and expense of a public offering. However, this also means that the securities will be subject to restrictions on resale, which can impact their liquidity.

Moreover, the guarantees and first-priority liens on assets provided by Amer Sports and its subsidiaries secure the notes and credit facilities. This is a protective measure for lenders but can also be a double-edged sword for the company if it limits future borrowing capacity or flexibility in managing its assets. The success of this complex transaction will depend on market conditions and investor appetite for Amer Sports' debt, which is not guaranteed. The legal framework of the transaction underscores its importance and potential impact on the company's financial structure.

Market Research Analyst

From a market perspective, Amer Sports' actions are indicative of a broader trend where companies in the sports and outdoor industry are looking to optimize their capital structures amid changing market conditions. The issuance of senior secured notes and the entry into new credit agreements could reflect a proactive approach to managing liquidity and capital resources in anticipation of future growth initiatives or to better position the company in a competitive market.

It is also essential to consider the timing of the transaction, as market interest rates and investor sentiment play crucial roles in the success of such offerings. A favorable response from the market could signal confidence in Amer Sports' long-term strategy and operational performance. Conversely, a lackluster market reaction might necessitate a reevaluation of the terms or the amount raised. As such, this transaction will be closely watched by industry stakeholders as a barometer for the financial health and strategic direction of Amer Sports.

HELSINKI, Finland--(BUSINESS WIRE)-- Amer Sports, Inc. (“Amer Sports,” “we,” “us” or the “Company”), a global group of iconic sports and outdoor brands, announced today that its wholly-owned subsidiary, Amer Sports Company (the “Issuer”), has launched an offering of $600 million aggregate principal amount of new senior secured notes due 2031 (the “Notes”) in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). In addition, the Company, the Issuer and certain of the Company’s other subsidiaries are seeking to enter into a new credit agreement (the “Credit Agreement”) and will incur a new $600 million USD term loan facility, a new €600 million EURO term loan facility and a new revolving credit facility, which will initially be a $710 million revolving credit facility established under the Credit Agreement, as the Company will maintain an existing $90 million bilateral credit facility, which is expected to ultimately be consolidated into a single revolving credit facility under the Credit Agreement (together, the “New Senior Secured Credit Facilities”).

The net proceeds from the offering of the Notes, along with the expected net proceeds from the New Senior Secured Credit Facilities, are expected to repay all outstanding indebtedness under the Company’s existing credit facilities, which will be terminated. Any remaining net proceeds are expected to be used for general corporate purposes.

The Notes will be, jointly and severally, unconditionally guaranteed on a senior secured basis by the Company and each of the Company’s subsidiaries (other than the Issuer) that is a borrower or a guarantor under the New Senior Secured Credit Facilities. The Notes and the related guarantees will be secured on a first-priority basis by liens on the same assets that secure the New Senior Secured Credit Facilities.

The foregoing transactions are subject to market and other conditions. There can be no assurance that the Company will be able to successfully complete the transactions on the terms described above, or at all.

The Notes will not be registered under the Securities Act, or any state securities law and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act and applicable state securities laws. The Notes will be offered in the United States only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act.

This press release is being issued pursuant to Rule 135c under the Securities Act and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offers of the Notes will be made only by means of a private offering memorandum.

About Amer Sports, Inc.

Amer Sports is a global group of iconic sports and outdoor brands, including Arc’teryx, Salomon, Wilson, Peak Performance, and Atomic. Our brands are creators of exceptional apparel, footwear, equipment, protective gear, and accessories that we believe give our consumers the confidence and comfort to excel.

With over 10,800 employees globally, Amer Sports’ purpose is to elevate the world through sport and to inspire people to lead better, healthier lives. Our vision is to be the global leader in premium sports and outdoor brands. With corporate offices in Helsinki, Munich, Kraków, and Shanghai, we have operations in 41 countries and our products are sold in 100+ countries. Our revenue in 2022 was $3.5 billion.

Forward-looking Statements

This press release contains statements that constitute forward-looking statements, including, but not limited to, our financing plans and the details thereof, including the proposed use of proceeds therefrom, the New Senior Secured Credit Facilities and the details thereof, the expected timing of the borrowing of the New Senior Secured Credit Facilities and our ability to close such transaction, the offering of the Notes and the details thereof, and our ability to close such offering and the other expected effects of the financing. Many of the forward-looking statements contained in this press release can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified under in “Risk Factors” included in the preliminary offering memorandum for the offering of the Notes. Forward-looking statements speak only as of the date they are made, and Amer Sports and the Issuer do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of an unanticipated event.

Source: Amer Sports, Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240205016880/en/

Media:

Anu Sirkiä

Vice President, Communications

anu.sirkia@amersports.com

Investor Relations:

Omar Saad

Vice President, Finance and Investor Relations

omar.saad@amersports.com

Source: Amer Sports, Inc.

FAQ

What is the total amount of the new senior secured notes offered by Amer Sports, Inc.?

Amer Sports, Inc. has launched an offering of $600 million aggregate principal amount of new senior secured notes due 2031.

What will the net proceeds from the offering of the Notes and the New Senior Secured Credit Facilities be used for?

The net proceeds are expected to repay all outstanding indebtedness under the Company’s existing credit facilities and for general corporate purposes.

Will the Notes be registered under the Securities Act?

No, the Notes will not be registered under the Securities Act, or any state securities law.

Who can the Notes be offered to in the United States?

The Notes will be offered in the United States only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act.

What type of offering is the press release referring to?

The press release is referring to a private offering of new senior secured notes due 2031.