BRP AND ITS PRINCIPAL SHAREHOLDER ANNOUNCE CLOSING OF PREVIOUSLY ANNOUNCED SECONDARY OFFERING

Rhea-AI Summary

BRP Inc. announced the closing of a bought deal secondary offering, with Bain Capital Integral Investors II, L.P. selling 2,000,000 subordinate voting shares at a price of C$91.00 per share. The net proceeds went directly to the Selling Shareholder, with BRP not receiving any proceeds from the Offering. Upon closing, Bain held 13,796,615 multiple voting shares of BRP, representing approximately 18.3% of the issued and outstanding shares of the Company and approximately 29.9% of the voting power attached to all of the shares. The Subordinate Voting Shares are listed on the Toronto Stock Exchange (TSX) and Nasdaq Global Select Market (NASDAQ) under the symbol 'DOO' and 'DOOO', respectively.

Positive

• None.

Negative

• The Company did not receive any proceeds from the Offering, which may indicate financial limitations or a need for additional capital. The significant percentage of voting power held by Bain Capital Integral Investors II, L.P. could potentially lead to a lack of control for other shareholders.

Insights

Financial Analyst

The completion of the secondary offering by Bain Capital indicates a liquidity event for the selling shareholder but does not directly infuse capital into BRP Inc. itself. The fixed price of C$91.00 per Subordinate Voting Share provides a temporary benchmark for the market, potentially stabilizing the stock price in the short-term. However, investors will be keen to monitor the stock's performance to assess whether this price point reflects the market's valuation of the company or if adjustments occur post-transaction. The lack of an over-allotment option suggests a conservative approach by RBC Capital Markets, possibly reflecting a calculated anticipation of market demand.

Long-term implications for BRP may include changes in shareholder composition and influence, especially considering Bain's remaining significant voting power. With approximately 29.9% of the voting power, Bain's future decisions regarding their holdings could lead to further market reactions. Investors should consider the potential for increased volatility around such events and the implications for corporate governance and strategic direction.

Market Research Analyst

The secondary offering's impact on BRP's market dynamics can be multifaceted. On one hand, the increased availability of shares may enhance liquidity, which is generally favorable for institutional and retail investors alike. On the other hand, the market may interpret the sale by Bain as a signal regarding the private equity firm's outlook on BRP's future performance. Analysts and investors often scrutinize such transactions for insights into insider sentiment.

Furthermore, the market's response to the news will likely be influenced by the broader economic context and sentiment within the recreational products industry. If the industry is experiencing growth, the additional shares may be absorbed with minimal impact. Conversely, in a downturn, the offering could place downward pressure on the share price. It is important for stakeholders to contextualize this event within industry trends and macroeconomic indicators to fully understand its implications.

VALCOURT, QC, Jan. 26, 2024 /PRNewswire/ - BRP Inc. (TSX: DOO) (NASDAQ: DOOO) ("BRP" or the "Company") announced today the closing of the previously announced bought deal secondary offering (the "Offering") pursuant to which Bain Capital Integral Investors II, L.P. ("Bain" or the "Selling Shareholder") sold 2,000,000 subordinate voting shares of BRP (the "Subordinate Voting Shares") at a price to the public of C$91.00 per Subordinate Voting Shares.

The Subordinate Voting Shares were offered by way of a prospectus supplement dated January 23, 2024 to the Company's short form base shelf prospectus dated February 23, 2023 filed with the securities regulatory authorities in each of the provinces and territories of Canada as well as with the U.S. Securities and Exchange Commission (SEC) as part of a registration statement on Form F-10 under the U.S./Canada Multijurisdictional Disclosure System.

All net proceeds have been paid directly to the Selling Shareholder. The Company did not receive any proceeds from the Offering.

The Subordinate Voting Shares were offered by RBC Capital Markets, which was not granted an over-allotment option in connection with the Offering.

BRP's Subordinate Voting Shares are listed on the Toronto Stock Exchange (TSX) and Nasdaq Global Select Market (NASDAQ) under the symbol "DOO" and "DOOO", respectively.

Upon closing of the Offering, Bain held 13,796,615 multiple voting shares of BRP, representing approximately 18.3% of the issued and outstanding shares of the Company (the "Shares") and approximately 29.9% of the voting power attached to all of the Shares. No securities regulatory authority has either approved or disapproved the contents of this press release. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such province, state or jurisdiction.

About BRP

BRP Inc. is a global leader in the world of powersports products, propulsion systems and boats built on over 80 years of ingenuity and intensive consumer focus. Through its portfolio of industry-leading and distinctive brands featuring Ski-Doo and Lynx snowmobiles, Sea-Doo watercraft and pontoons, Can-Am on and off-road vehicles, Alumacraft and Quintrex boats, Manitou pontoons and Rotax marine propulsion systems as well as Rotax engines for karts and recreational aircraft, BRP unlocks exhilarating adventures and provides access to experiences across different playgrounds. The Company completes its lines of products with a dedicated parts, accessories and apparel portfolio to fully optimize the riding experience. Committed to growing responsibly, BRP is developing electric models for its existing product lines and exploring new low voltage and human assisted product categories. Headquartered in Quebec, Canada, BRP has annual sales of CA$10 billion from over 130 countries and a global workforce of close to 23,000 driven, resourceful people.

Ski-Doo, Lynx, Sea-Doo, Can-Am, Rotax, Manitou, Alumacraft, Quintrex and the BRP logo are trademarks of Bombardier Recreational Products Inc. or its affiliates. All other trademarks are the property of their respective owners.

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SOURCE BRP Inc.

FAQ

What was the price per share in the bought deal secondary offering?

The price per subordinate voting share in the offering was C$91.00.

How many shares were sold in the offering?

Bain Capital Integral Investors II, L.P. sold 2,000,000 subordinate voting shares in the offering.

Did BRP Inc. receive any proceeds from the offering?

No, the company did not receive any proceeds from the offering.

What is the ticker symbol for BRP Inc. on the Toronto Stock Exchange?

The ticker symbol for BRP Inc. on the Toronto Stock Exchange is 'DOO'.

What percentage of voting power does Bain Capital Integral Investors II, L.P. hold after the closing of the offering?

After the closing, Bain Capital Integral Investors II, L.P. holds approximately 29.9% of the voting power attached to all of the shares of BRP Inc.