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Uni-Select Announces C$125 Million Convertible Debenture Financing, Concludes Strategic Review Process

Uni-Select also announced the appointment of David Samuel and Matthew Kunica as directors of the corporation, effective Jan. 1, 2020.

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Uni-Select Inc. has announced the completion of a private placement offering of C$125 million principal amount of convertible senior subordinated unsecured debentures.

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Birch Hill Equity Partners Management Inc., as shareholder and lead investor in the offering, subscribed for C$75 million principal amount of debentures. The remaining C$50 million was purchased by institutional investors following a private marketing approach.

“With this investment, a group which includes some of our largest shareholders are demonstrating their confidence in our team, our strategy, and the direction we’re taking to drive long-term value, as we continue to yield tangible cost-savings and sustainable profitability improvement from our Performance Improvement Plan,” said Brent Windom, president and CEO of Uni-Select Inc. and president and chief operating officer, Canadian Automotive Group.

Uni-Select intends to use the net proceeds from the Offering to reduce borrowings under its senior debt credit facility and to pursue strategic growth opportunities and cost reduction initiatives.

RBC Capital Markets and BMO Capital Markets acted as co-agents and bookrunners on the Offering and National Bank Financial Markets acted as financial advisor to Birch Hill.

Conclusion of the Strategic Review Process 

In September 2018, Uni-Select announced that its board of directors had formed a Special Committee of independent members to oversee a review of strategic alternatives with the goal of maximizing value for shareholders. Through this process, which included the review and evaluation of a number of alternatives, the board has determined that modifying the capital structure with this financing and positioning the corporation to pursue identified growth opportunities and cost-reduction initiatives is the best alternative for maximizing value for shareholders. Uni-Select state that both the board and the corporation remain open to evaluating future opportunities that align with its business strategies and enhance shareholder value.

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Appointment of Directors

Uni-Select also announced the appointment of David Samuel and Matthew Kunica as directors of the corporation, effective Jan. 1, 2020.

Samuel joined Birch Hill in 2005. He is chairman of Groupe Distinction Inc. and serves on the boards of directors of Cozzini Bros, Inc. and Softchoice Corp. Prior to joining Birch Hill, Samuel had more than 15 years of experience in private equity, operations, consulting and investment banking. His experience includes serving as president, Rogers Cable (High Speed Internet Access) and working at McKinsey & Co. and Morgan Stanley.

Kunica joined Birch Hill in 2003 and currently serves on the boards of CCM Hockey, HomeEquity Bank and Bio Agri Mix. He has played a key role in Birch Hill’s investments in a diverse cross section of companies. Prior to joining Birch Hill, Kunica worked in the investment banking groups of both Credit Suisse First Boston and BMO Nesbitt Burns in Toronto.

Effective Jan. 1, 2020, the Uni-Select board of directors will be composed of nine members and one vacancy, which is expected to be used to add a new member and increase diversity before the company’s next annual shareholder meeting.

“I wish to take this opportunity to thank David Bibby, Jeff Hall, George Heath, Dennis Welvaert and Michael Wright for their invaluable contributions to Uni-Select,” said Michelle Cormier, chair of the board. They will be leaving the Board effective January 1, 2020.

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Impairment Loss on a Portion of the Goodwill

While Uni-Select is taking meaningful action to confront a series of headwinds in Europe, due to market softness and uncertainties surrounding Brexit, the corporation will be recording a non-recurring, non-cash goodwill impairment charge between US$45 million and US$50 million, related to a portion of the goodwill of its operations in the U.K. This impairment will be reflected in the corporation’s upcoming fourth quarter and year-end financial statements.

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