NOT FOR DISTRIBUTION IN THE UNITED STATES
For immediate release
Aritzia Announces $382 Million Secondary Offering of Subordinate Voting Shares and Concurrent Block Trade
January 10, 2017 – Vancouver, BC – Aritzia Inc. (TSX: ATZ) (“Aritzia”), an innovative design house and fashion retailer of exclusive brands, announced today that an investment vehicle managed by Berkshire Partners LLC, a Boston-based private equity firm (the “Berkshire Shareholder”), an entity controlled by Brian Hill, Aritzia’s Founder and Chief Executive Officer (the “Hill Shareholder”) and Sweet Park Holdings Inc., an entity indirectly controlled by Aldo Bensadoun, a director of Aritzia (the “Bensadoun Shareholder” and together with the Berkshire Shareholder and the Hill Shareholder, the “Selling Shareholders”), have entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets, BofA Merrill Lynch and TD Securities Inc. (the “Underwriters”), pursuant to which the Underwriters have agreed to purchase on a bought deal basis an aggregate of 20,100,000 subordinate voting shares held by the Selling Shareholders at an offering price of $17.45 per share (the “Offering Price”) for total gross proceeds to the Selling Shareholders of $350,745,000 (the “Offering”). Aritzia will not receive any proceeds from the Offering.
The Underwriters have also been granted an over-allotment option (the “Over-Allotment Option”) to purchase up to an additional 3,015,000 subordinate voting shares from the Berkshire Shareholder and the Bensadoun Shareholder at the Offering Price for additional gross proceeds of $52,611,750 if the Over-Allotment Option is exercised in full. The Over-Allotment Option can be exercised at any time, in whole or in part, for a period of 30 days from the closing date of the Offering, which is expected to occur on or about January 26, 2017 and is subject to certain customary closing conditions.
A preliminary short form prospectus relating to the Offering will be filed by no later than January 12, 2017 with Canadian securities regulating authorities.
In a separate transaction that is expected to close concurrent with the Offering, a group of employees of Aritzia, not including Brian Hill, will be selling an aggregate of 1,788,366 subordinate voting shares, on a block trade basis, at the Offering Price for total gross proceeds of $31,206,987 (the “Concurrent Block Trade”). The Concurrent Block Trade is expected to close on or about January 26, 2017. The completion of the Offering is not conditional upon the completion of the Concurrent Block Trade.
Upon completion of the Offering and the Concurrent Block Trade and assuming no exercise of the Over-Allotment Option, the Berkshire Shareholder and its affiliates and the Hill Shareholder will, directly or indirectly, own or control approximately 28.7% and 22.6%, respectively, of the issued and outstanding subordinate voting shares and multiple voting shares (collectively, the “Shares”), and approximately 51.1% and 40.2%, respectively, of the voting power attached to all of the Shares. As a result, the Hill Shareholder will have met its previously disclosed long-term target equity ownership of between 20% to 25% of the aggregate issued and outstanding Shares.
In connection with the Offering, Aritzia will release certain optionholders from lock-up arrangements in order to permit the employee group to complete the Concurrent Block Trade. Aritzia will also release from lock-up certain other employees in order to permit them to sell up to an aggregate of 968,210 subordinate voting shares following completion of the Offering, provided the market price of Aritzia subordinate voting shares is at or above the Offering Price at the time of such sale.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The subordinate voting shares have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. Accordingly, the subordinate voting shares may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Aritzia in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Aritzia
Aritzia is an innovative design house and fashion retailer of exclusive brands. The Company designs apparel and accessories for its collection of exclusive brands and sells them under the Aritzia banner. The Company’s expansive and diverse range of women’s fashion apparel and accessories addresses a broad range of style preferences and lifestyle requirements. The Company is well known and deeply loved by its customers in Canada with growing customer awareness and affinity in the United States and outside of North America. The Company aims to delight its customers through an aspirational shopping experience and exceptional customer service that extends across its more than 75 retail stores and its eCommerce business, aritzia.com.
About Berkshire Partners
Berkshire Partners, a Boston-based investment firm, has made over 115 investments since its founding in 1986 through nine private equity funds with more than $16 billion in aggregate capital. Berkshire has developed industry experience in several areas including consumer and retail, communications, business services, industrials and healthcare. Berkshire has a long history of partnering with management teams to build market leading growth companies. Prior investments in the retail sector include Bare Escentuals, Carter’s and Party City.
Forward-Looking Information
Certain information in this press release, including statements relating to the closing date of the Offering, the completion of the Concurrent Block Trade, the release by Aritzia of certain employees from lock-up arrangements with the Company in order to facilitate the sale by such employees of subordinate voting shares following the completion of the Offering, and the exercise by the Underwriters of the Over-Allotment Option, constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events.
Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Aritzia as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail under the “Risk Factors” sections of the management’s discussion and analysis of financial condition and results of operations of Aritzia for the 13- and 39-week periods ended November 27, 2016 and November 29, 2015 and the long form prospectus of Aritzia dated September 26, 2016, each available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect Aritzia; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. In particular, the closing of the Offering is subject to customary closing conditions and there can be no assurance that all such conditions will be satisfied. The forward-looking statements contained in this press release are made as of the date of this press release, and Aritzia expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
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