Bain Said to Weigh Sale of Stake in Snowmobile Maker BRP (1)

Jan 11, 2017 4:11 pm ET

(Bloomberg) -- Bain Capital is weighing options for its stake in BRP Inc., more than a decade after teaming up with Quebec’s Bombardier family to buy the maker of Ski-Doo snowmobiles and Sea-Doo watercraft, people familiar with the plan said.

The private equity firm intends to cash out all or part of its stake this year, according to the people, who asked not to be named because they aren’t authorized to speak publicly. Options for Bain include selling the holding to another investor or proceeding with a secondary sale on the stock market, the people said. Bain hasn’t yet decided which alternative to pursue or hired bankers to handle a deal, the people said.

Bain holds 31.7 million multiple voting shares of BRP, according to a regulatory filing issued in May. That’s equivalent to about 28 percent of the company’s outstanding shares and 37 percent of total votes.

BRP became a standalone company in 2003 when Bombardier Inc., Canada’s biggest aerospace company, sold its recreational-products business to investors including Bain, Caisse de Depot et Placement du Quebec and members of the Bombardier and Beaudoin families. BRP is based in Valcourt, the Quebec town where Joseph-Armand Bombardier started building snowmobiles in the 1930s.

A representative of Boston-based Bain didn’t respond to a request for comment. BRP and closely held Beaudier Group, the investment arm of the Bombardier and Beaudoin families, declined to comment.

Share Gains

BRP conducted an initial public offering in May 2013, raising C$254 million ($193 million) by selling shares at C$21.50 each. The shares dropped 2.5 percent to C$27.33 at 1:36 p.m. Wednesday in Toronto, giving the company a market value of about C$3 billion. They have gained about 27 percent from the time of the IPO.

Bain sold about 7.7 million subordinate voting shares of the company in a January 2014 secondary offering, which followed the sale of 6 million shares three months earlier.

Beaudier controls 36 percent of BRP’s outstanding stock and about 49 percent of the votes, according to the May filing.

BRP also builds outboard engines, the three-wheeled Can-Am Spyder motorcycle and all-terrain vehicles such as the Outlander. The company makes its products at eight facilities in Canada, Mexico, Austria, the U.S. and Finland.

The manufacturer has transferred some operations to Mexico in a bid to lower costs since 2006. In 2015, BRP stopped building Sea-Doos in Quebec and shifted production to one of its Mexican facilities.

BRP is targeting annual revenue of about C$6 billion by fiscal 2021, up from C$3.8 billion in 2016. The company is aiming for annual profit of C$3.50 a share by 2021, up from a projected range of C$1.86 to C$1.96 in the current fiscal year.

(Updates with stock trading in sixth paragraph.)

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