.8
FORM 51-102
MATERIAL CHANGE REPORT
| 1. | Name and Address of Company |
BRP Inc. (“BRP” of the “Company”)
726 Saint-Joseph Street
Valcourt, Québec
J0E 2L0
| 2. | Date of Material Change |
June 11, 2019.
| 3. | Press Releases |
The press release reporting the material change described in this report was disseminated via Marketwired on June 11, 2019 and was filed with each of the Canadian securities regulatory authorities via SEDAR.
| 4. | Summary of Material Change |
On June 11, 2019, BRP announced the proposed terms and conditions of its substantial issuer bid (the “Offer”) to purchase for cancellation up to $300,000,000 of its subordinate voting shares (the “Shares”), by way of a combination of a “modified Dutch auction” and a proportionate tender. Shareholders wishing to tender to the Offer will be entitled to do so pursuant to: (i) auction tenders in which they will specify the number of Shares being tendered at a price of not less than $44.00 and not more than $52.00 per Share in increments of $0.10 per Share, (ii) purchase price tenders in which they will not specify a price per Share, but will rather agree to have a specified number of Shares purchased at the purchase price to be determined by auction tenders, or (iii) proportionate tenders in which they will agree to sell, at the purchase price to be determined by auction tenders, a number of Shares that will result in them maintaining their proportionate equity ownership in BRP following completion of the Offer.
| 5.1 | Full Description of Material Change |
On June 11, 2019, BRP announced the proposed terms and conditions of its Offer pursuant to which BRP will offer to purchase for cancellation up to $300,000,000 of its Shares at a purchase price to be determined by BRP. The Offer will proceed by way of a combination of a “modified Dutch auction” and a proportionate tender. Shareholders wishing to tender to the Offer will be entitled to do so pursuant to: (i) auction tenders in which they will specify the number of Shares being tendered at a price of not less than $44.00 and not more than $52.00 per Share in increments of $0.10 per Share, (ii) purchase price tenders in which they will not specify a price per Share, but will rather agree to have a specified number of Shares purchased at the purchase price to be determined by auction tenders, or (iii) proportionate tenders in which they will agree to sell, at the purchase price to be determined by auction tenders, a number of Shares that will result in them maintaining their proportionate equity ownership in BRP following completion of the Offer. Shareholders who validly deposit Shares or multiple voting shares without specifying the method in which they are tendering such shares will be deemed to have made a purchase price tender.
Holders of multiple voting shares will be entitled to participate in the Offer. Multiple voting shares proposed to be taken up by BRP will be converted into Shares on a one-for-one basis immediately prior to take up. Beaudier Inc., 4338618 Canada Inc. and Bain Capital Luxembourg Investments S.à r.l., which collectively hold approximately 51.1% of BRP’s issued and
outstanding Shares and multiple voting shares, have advised BRP that they will make proportionate tenders in connection with the Offer in order to maintain their proportionate equity ownership in BRP following completion of the Offer.
As of June 11, 2019, BRP had 42,313,759 Shares and 54,101,384 multiple voting shares issued and outstanding.
The purchase price to be paid by BRP for each validly deposited Share will be determined upon expiry of the Offer and will be based on the number of Shares validly deposited pursuant to auction tenders and purchase price tenders, and the prices specified by shareholders making auction tenders. As a result, BRP’s shareholders other than Beaudier Inc., 4338618 Canada Inc., Bain Capital Luxembourg Investments S.à r.l. and shareholders who make a Proportionate Tender will set the purchase price for the Offer. The purchase price will be the lowest price (which will not be more than $52.00 per Share and not less than $44.00 per Share) which enables BRP to purchase Shares up to the maximum amount available for auction tenders and purchase price tenders, determined in accordance with the terms of the Offer. Shares deposited at or below the purchase price as finally determined by BRP will be purchased at such purchase price. Shares that will not be taken up in connection with the Offer, including Shares deposited pursuant to auction tenders at prices above the purchase price, will be returned to the shareholders.
If the aggregate purchase price for Shares validly tendered pursuant to auction tenders and purchase price tenders is greater than the amount available for auction tenders and purchase price tenders (after taking into consideration the proportionate tenders), BRP will purchase Shares from the holders of Shares who made purchase price tenders or auction tenders at or below the purchase price as finally determined by BRP on a pro rata basis, except that “odd lot” holders (holders of less than 100 Shares) will not be subject to proration.
The Company initially announced that its Board of Directors had authorized the launch of the Offer pursuant to which the Company would offer to purchase for cancellation up to $300 million of its Shares on May 30, 2019. At the time of such announcement, the Company’s intention to launch the Offer remained subject to obtaining the necessary exemptive relief under applicable securities laws in the United States and Canada and the Board of Directors determining the terms and pricing of the Offer.
The formal offer to purchase, issuer bid circular, letter of transmittal, notice of guaranteed delivery and other related documents (the “Offer Documents”) containing the terms and conditions of the Offer, instructions for tendering Shares or multiple voting shares, and the factors considered by BRP, its Special Committee and its Board of Directors in making its decision to approve the Offer, among other things, were mailed on June 13, 2019. The Offer Documents were filed with the applicable securities regulators in the United States and Canada on same date, and are available free of charge on SEDAR at www.sedar.com and on EDGAR at www.sec.com. Shareholders should carefully read the Offer Documents prior to making a decision with respect to the Offer.
The Offer will not be conditional upon any minimum number of Shares being tendered. The Offer will, however, be subject to other conditions and BRP will reserve the right, subject to applicable laws, to withdraw or amend the Offer, if, at any time prior to the payment of deposited Shares, certain events occur.
BRP’s Board of Directors has approved the making of the Offer and the purchase price for Shares upon the recommendation of its Special Committee. However, none of BRP, its Special Committee or its Board of Directors, the dealer manager or the depositary makes any recommendation to any shareholder as to whether to deposit or refrain from depositing any Shares under the Offer. Shareholders are urged to evaluate carefully all information in the Offer, consult their own financial, legal, investment and tax advisors and make their own decisions as to whether to deposit Shares or multiple voting shares under the Offer and, if so, how many such shares to deposit and at what price or prices.
BRP has retained RBC Capital Markets to act as financial advisor and dealer manager in connection with the Offer and Computershare Trust Company of Canada (“Computershare”) to act as depositary. Any questions or requests for information may be directed to Computershare, as the depositary for the Offer, at 1-800-564-6253 (Toll Free – North America) or 1-514-982-7888 (outside North America) or to RBC Capital Markets, as dealer manager for the Offer, at 1-855-214-1269 (Toll Free).
| 5.2 | Disclosure for Restructuring Transactions |
Not applicable.
| 6. | Reliance on subsection 7.1(2) of National Instrument 51-102 |
Not applicable.
| 7. | Omitted Information |
None.
| 8. | Executive Officer |
For additional information, please contact Paule Morisset, Assistant Secretary at BRP at 514-732-7062.
| 9. | Date of Report |
June 13, 2019.