BRP Inc., whose shares are expected to begin trading May 29 under the TSX symbol DOO, expects to raise at least $262.3 million in gross proceeds from sale of the 12.2 million subordinate voting shares through the IPO.
The gross proceeds could rise to more than $300 million if an option for 1.8 million additional shares is exercised by underwriters.
The Quebec-based maker of snowmobiles, personal watercraft and all-terrain vehicles said it plans to use $240.8 million of net proceeds to repay debt.
An additional $37.3 million from the over-allotment would be allocated for working capital and general corporate purposes.
The underwriting agreement closes May 29, but the overallotment option can be exercised for another 30 days.
The company said it believes the outlook for the industry is positive due to the improving economic environment, growth in new product lines and growth in international markets.
BRP earned $121 million on $2.9 billion of sales for the year ended Jan. 31, according to the prospectus filed with regulators.
The company's results have improved over the past two years as it earned $83.8 million for the year ended Jan. 31, 2012 and $35 million for the year before that.
The business was spun off from Bombardier Inc. (TSX:BBD.B) in 2003 when it was sold to members of the Bombardier and Beaudoin families, U.S. private equity firm Bain Capital and the Caisse de depot for $960 million.
The company is currently owned by a subsidiary of Bain Capital, the Beaudier group and the Caisse. Bain owns half the company, the Beaudier group has a 35 per cent stake and the Caisse has 15 per cent.
After the offering is completed and excluding any overallotment of shares, the public will own 16.6 per cent of all shares but hold just 3.2 per cent of total voting power.
Each multiple voting share is entitled to six votes.
Bain will own 48.3 per cent of multiple voting shares and 46.8 per cent of outstanding shares. Beaudier will control 41.1 per cent of the total voting power while the Caisse will control 8.9 per cent of votes.
Beaudier Inc. is a family-owned company controlled by Laurent Beaudoin, who is a former CEO of Bombardier Inc. and a son-in-law of Joseph-Armand Bombardier, the Quebec inventor who founded the company.
The prospectus also revealed the company paid $376 million in special distributions on April 13 and an additional $153 million in dividends to its current shareholders on April 30.
It doesn't intend to initially pay a dividend after the IPO.
Based in Valcourt, Que., BRP has approximately 6,800 employees around the world.