Dorel Finalizing Agreements to Recapitalize Its Balance Sheet Through New Credit Facilities and Issue of Preferred Shares

 MONTRÉAL, Sept. 22, 2025 (GLOBE NEWSWIRE) -- Dorel Industries Inc. (TSX: DII.B, DII.A) announced today that it is finalizing the terms and conditions of new credit facilities with a group of lenders led by affiliates of TCW Asset Management Company LLC (“TCW”), as administrative agent, in an amount up to $310 million, and of an agreement with Alberta Investment Management Corporation (“AIMCo”) for a private placement of preferred shares in an amount of $75 million. Dorel expects that definitive agreements will be signed this week and that closing of the two transactions will take place on or about September 29, 2025. All dollar amounts in this press release are in US dollars unless otherwise indicated.

Dorel intends to use the proceeds of the new credit facilities and preferred shares to repay in full Dorel’s current senior secured debt in an amount of approximately $180 million, to pay for the restructuring costs of Dorel’s Home segment and for working capital.

Closing of the two transactions is subject to signing definitive agreements and standard closing conditions. Dorel will issue a press release when closing of the transactions take place. The two proposed transactions were negotiated at arm’s length.

New Credit Facility

The new financing agreement to be entered into with TCW, as administrative agent, and a group of lenders will include senior secured credit facilities in an amount up to $310 million, consisting of a $175 million revolving facility subject to a borrowing base, of which $110 million will be drawn at the closing of the transaction, and a $135 million term loan. The new credit facilities will have a term of five years and will be guaranteed by certain of Dorel’s subsidiaries. The loans will bear interest at a variable rate based on SOFR (secured overnight financing rate) plus a margin. The financing agreement will contain financial and other customary covenants on the part of Dorel and certain of its subsidiaries. TCW will be entitled to nominate one person to join Dorel’s Board of Directors.

Preferred Shares

The preferred shares to be issued to AIMCo will have an initial annual dividend yield of 17%. On each of the third and fourth anniversaries of the date of issuance, the annual dividend rate will increase by 1.5%, to a maximum dividend rate of 20%. Dorel may, in its sole discretion, pay accrued and accumulated dividends on the preferred shares by the issuance of additional preferred shares in lieu of cash.

The preferred shares will provide that in the event of a sale of Dorel or the disposition or transfer of any part of Dorel or its assets representing more than 35% of its trailing twelve months’ consolidated revenues, all preferred shares will be redeemed for an amount equal to their original issue price plus all accrued and unpaid dividends. From the second anniversary of their date of issuance, the preferred shares will be redeemable at Dorel’s option at a price equal to 115% of their original issue price plus all accrued and unpaid dividends. From the fifth anniversary of the date of issuance, the preferred shares will be retractable at any time at the option of AIMCo for an amount equal to their original issue price plus all accrued and unpaid dividends. The preferred shares are non-voting and are not convertible into Dorel’s Class A Multiple Voting Shares (“Class A Shares”) or Class B Subordinate Voting Shares (“Class B Shares”). AIMCo will be entitled to nominate one person to join Dorel’s Board of Directors.

Warrants to Purchase Class B Subordinate Voting Shares

In connection with the new credit facilities, Dorel will issue warrants to TCW and certain other lenders under the credit facilities in an amount equal to 5% of the number of Dorel’s outstanding shares on a fully-diluted basis, representing 1,877,408 warrants (the “Lender Warrants”). Each Lender Warrant will entitle the holder thereof to acquire one Class B Share at an exercise price of CAD $0.01 for a period of seven years. The Lender Warrants will have a pre-emptive right giving the holders thereof the right to participate on a pro rata basis in any issuance, offering or other distribution by Dorel of its shares or securities convertible into its shares.

In connection with the issuance of the preferred shares, Dorel will issue warrants to AIMCo in an amount equal to 8% of the number of Dorel’s outstanding shares on a fully-diluted basis, representing 3,003,853 warrants (the “AIMCo Warrants”). Similar to the Lender Warrants, each of the AIMCo Warrants will entitle the holder thereof to acquire one Class B Share at an exercise price of CAD $0.01 for a period of seven years. The Lender Warrants and AIMCo Warrants will have standard anti-dilution provisions.

The 1,877,408 Class B Shares issuable upon the exercise of the Lender Warrants, and 3,003,853 Class B Shares issuable upon the exercise of the AIMCo Warrants, for a total of 4,881,261 Class B Shares, represent 5.75% and 9.19%, respectively, of Dorel’s 32,666,902 issued and outstanding Class A Shares and Class B Shares, for a total of 14.94%.

The exercise price of both the Lender Warrants and AIMCo Warrants represents a discount of 99.25% from the current trading price of the Class B Shares on the Toronto Stock Exchange. As the exercise price of the Lender Warrants and AIMCo Warrants is less than “market price” of Dorel’s Class B Shares, as that term is defined in the TSX Company Manual, pursuant to section 607(i) of the TSX Company Manual the Lender Warrants and AIMCo Warrants may be issued only if approved by Dorel’s shareholders. In that regard, Dorel has submitted written consents from shareholders holding shares to which there are attached more than 50% of the votes attached to Dorel’s voting securities pursuant to section 604(d) of the TSX Company Manual. The written consents confirm that the shareholders are familiar with the terms of the two proposed transactions and that if a meeting of shareholders of Dorel were called to consider a resolution approving the Lender Warrants and AIMCo Warrants, they would vote all of their respective Dorel shares in favour of the resolution. Dorel has applied to the Toronto Stock Exchange to accept the written shareholder consents in lieu of a shareholders’ meeting, subject to this press release being issued at least five business days prior to the closing of the transactions. The two proposed transactions will not materially affect control of Dorel.

The securities to be issued at the closing of the two transactions will be subject to a four-month “hold period” under applicable Canadian securities regulations.

Advisors

TD Securities Inc. is acting as sole and exclusive financial advisor to Dorel in connection with the debt financing. TD Securities Inc. and BMO Capital Markets are acting as placement agents in connection with the offering of preferred shares.

Profile

Dorel Industries Inc. (TSX: DII.B, DII.A) is a global organization, operating two distinct businesses in juvenile products and home products. Dorel’s strength lies in the diversity, innovation and quality of its products as well as the superiority of its brands. Dorel Juvenile’s powerfully branded products include global brands Maxi-Cosi, Safety 1st and Tiny Love, complemented by regional brands such as BebeConfort, Cosco, Mother’s Choice and Infanti. Dorel Home, with its comprehensive e-commerce platform, markets a wide assortment of domestically produced and imported furniture. Dorel has annual sales of US$1.3 billion and employs approximately 3,500 people in facilities located in twenty-two countries worldwide.

Caution Regarding Forward-Looking Statements

Certain statements included in this press release may constitute “forward-looking statements” within the meaning of applicable Canadian securities legislation. Except as may be required by Canadian securities laws, Dorel Industries Inc. (the “Company”) does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties, including statements regarding the proposed new credit facilities and proposed issuance of preferred shares, the impact of the macro-economic environment, including inflationary pressures, changes in consumer spending, exchange rate fluctuations, the imposition of tariffs, and high interest rates on the Company’s business, financial position and operations, and are based on several assumptions which give rise to the possibility that actual results could differ materially from the Company’s expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, the Company cannot guarantee that any forward-looking statement will materialize, or if any of them do, what benefits the Company will derive from them. In particular, the Company cannot guarantee that it will sign definitive agreements for the two proposed transactions described in this press release, that the two proposed transactions will be completed, or completed on the terms and conditions and the timetable set out above. Forward-looking statements are provided in this press release for the purpose of giving information about management’s current expectations and plans and allowing investors and others to get a better understanding of the Company’s operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose.

Forward-looking statements made in this press release are based on a number of assumptions that the Company believed were reasonable on the day it made the forward-looking statements. Factors that could cause actual results to differ materially from the Company’s expectations expressed in or implied by the forward-looking statements include:

• general economic and financial conditions, including those resulting from the current high inflationary environment;
• changes in applicable laws or regulations;
• changes in product costs and supply channels, including disruption of the Company’s supply chain resulting from the macro-economic environment;
• foreign currency fluctuations, including high levels of volatility in foreign currencies with respect to the US dollar reflecting uncertainties related to the macro-economic environment;
• the effect of tariffs on imported goods;
• customer and credit risk, including the concentration of revenues with a small number of customers;
• costs associated with product liability;
• changes in income tax legislation or the interpretation or application of those rules;
• the continued ability to develop products and support brand names;
• changes in the regulatory environment;
• outbreak of public health crises that could adversely affect global economies and financial markets, resulting in an economic downturn which could be for a prolonged period of time and have a material adverse effect on the demand for the Company’s products and on its business, financial condition and results of operations;
• the effect of international conflicts on the Company’s sales;
• continued access to capital resources, which may be adversely impacted by the macro-economic environment;
• failures related to information technology systems;
• changes in assumptions in the valuation of goodwill and other intangible assets and any future decline in market capitalization;
• there being no certainty that the Company will declare any dividend in the future;
• increased exposure to cybersecurity risks as a result of remote work by the Company’s employees;
• the Company’s ability to protect its current and future technologies and products and to defend its intellectual property rights;
• potential damage to the Company’s reputation; and
• the effect of climate change on the Company.
  
  

These and other risk factors that could cause actual results to differ materially from expectations expressed in or implied by the forward-looking statements are discussed in the Company’s annual MD&A and Annual Information Form filed with the applicable Canadian securities regulatory authorities. The risk factors set out in the previously mentioned documents are expressly incorporated by reference herein in their entirety.

The Company cautions readers that the risks described above are not the only ones that could impact it. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial may also have a material adverse effect on the Company’s business, financial condition, or results of operations. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

CONTACTS:
Dorel Industries Inc.
John Paikopoulos
(514) 934-3034

Dorel Industries Inc.
Jeffrey Schwartz
(514) 934-3034

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