Saputo closes $659 M offering of common shares

The Offering was conducted through a syndicate of underwriters led by National Bank Financial Inc. and BMO Capital Markets, and including CIBC World Markets Inc., Scotia Capital Inc., TD Securities Inc., RBC Dominion Securities Inc., Desjardins Securities Inc. and Merrill Lynch Canada Inc

Saputo Inc., one of the top ten dairy processors in the world, has announced the closing of its previously announced public offering of common shares of the Company and concurrent private placement of common shares of the Company, for aggregate gross proceeds of approximately $659 million.

The Offering was conducted through a syndicate of underwriters led by National Bank Financial Inc. and BMO Capital Markets, and including CIBC World Markets Inc., Scotia Capital Inc., TD Securities Inc., RBC Dominion Securities Inc., Desjardins Securities Inc. and Merrill Lynch Canada Inc. (collectively, the “Underwriters”), who purchased, on a bought deal basis, 11,617,300 Offered Shares, including the 1,515,300 Offered Shares issued as a result of the exercise in full of the over-allotment option granted to the Underwriters, from treasury at a price of $39.60 per Offered Share (the “Offering Price”), for aggregate gross proceeds of approximately $460 million. The Offered Shares were offered to the public by way of a short form prospectus dated September 4, 2019 in all Canadian provinces.

Recently Saputo also completed the Concurrent Private Placement whereby each of its two principal shareholders, Jolina Capital Inc. (“Jolina”), a holding company controlled by Mr. Emanuele (Lino) Saputo, and Placements Italcan Inc. (“Italcan”), a holding company controlled by Mr. Francesco Saputo, acquired, on a private placement basis, beneficial ownership of, and control or direction over, 2,525,253 Private Placement Shares and 2,500,000 Private Placement Shares, respectively, at the Offering Price, for gross proceeds of approximately $100 million and $99 million, respectively, in accordance with the subscription agreements entered into between the Company and each of Jolina and Italcan on August 21, 2019. The Underwriters have not received any commission or fee in respect of the Concurrent Private Placement.

Saputo expects to use the net proceeds of the Offering and the Concurrent Private Placement to repay outstanding indebtedness incurred in connection with completed acquisitions and for general corporate purposes. The Offering and the Concurrent Private Placement are part of the Company’s capital management strategy of reducing its long-term leverage over a reasonable period of time and are intended to provide the Company with further flexibility to pursue its growth strategy.

Immediately prior to the Offering and the Concurrent Private Placement, Jolina and Italcan had beneficial ownership of, and control and direction over, 127,059,848 and 40,000,000 common shares of the Company, respectively, representing approximately 32.5% and 10.2%, respectively, of the Company’s issued and outstanding common shares. Immediately following the Offering and the Concurrent Private Placement, Jolina and Italcan have beneficial ownership of, and control and direction over, 129,585,101 and 42,500,000 common shares of the Company, respectively, representing approximately 31.8% and 10.4%, respectively, of the Company’s issued and outstanding common shares. Jolina and Italcan have beneficial ownership of, and control and direction over, common shares of the Company for investment purposes, and in accordance with applicable securities laws, may increase or decrease their investment in the Company depending on market conditions and other relevant factors.