Dorel shares surge with deal to sell sports segment for US$810 million
MONTREAL — Dorel Industries Inc. shares surged a day after it announced a US$810-million deal to sell its bicycle segment Dorel Sports that makes brands such as Cannondale, Mongoose and Schwinn to Dutch mobility group Pon Holdings B.V.
The Montreal-based company’s B shares gained $9.46 or 90.8 per cent at $19.88 in morning trading on the Toronto Stock Exchange.
Dorel says it will use the proceeds of the sale to reduce debt, return capital to shareholders and for general corporate purposes.
The transaction will consist of the sale of 100 per cent of the shares of Dorel’s wholly owned subsidiary companies comprising Dorel Sports which it has owned since 2004 as well as certain related assets.
Dorel says it plans to focus on growing its existing businesses of home and juvenile products. The company says those businesses are facing challenges related to inflation and supply chain pressures.
The sale has been approved by Dorel’s board of directors and is expected to close before the end of the first quarter of 2022.
This report by The Canadian Press was first published Oct. 12, 2021.
Companies in this story: (TSX:DII.B, DII.A)
The Canadian Press