BRP prices IPO at C$21.50, top of marketed range

Tue May 21, 2013 6:30pm EDT
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By Stephen Lacey

May 21 (IFR) - That BRP, the former recreational products group of Bombardier, would appeal to investors on its IPO is hardly surprising.

Public-comparables Polaris, Arctic Cat, and to a lesser extent Harley Davidson have been on a tear, all trading at historically rich multiples and at or near all-time high share prices.

Realistically the only question was whether the company, acquired by Bain Capital along with members of the founding Beaudoin family and Caisse de depot in 2003, could capture that full valuation. The answer was almost entirely.

Joint bookrunners BMO Capital Markets, RBC Capital Markets, UBS and Citigroup set pricing on an upsized 12.2m shares at C$21.50, the top of a C$18.50-$21.50 marketing range on a deal originally sized at 11.7m shares, according to two sources close to the situation.

The stock will begin trading on a when-issued basis tomorrow morning and formally on the TSX under the symbol "DOO" on May 29, when the deal settles.

That the interest was geographically diverse - 55%/30%/15% in US/Canada/international - is notable in light of pushback on recent Canadian IPOs by Oryx Petroleum and Silver Ridge Power.

A lack of institutional support in the domestic markets forced Oryx, an E&P with assets in Iraq and West Africa, to accept a reduced valuation offered it by European accounts on its IPO. Silver Ridge Power, a solar-power producer backed by AES and Riverstone, pulled its C$150m IPO when faced with a similar proposition.

BRP, which makes popular recreational vehicles such as Ski-Doo jet-skis and Sea-Doo snowmobiles, generates more than one-third of its revenue outside the US and Canada.   Continued...