NFI Group Inc. , one of the world’s leading independent bus and coach manufacturers, today announced that it has entered into an agreement with a syndicate of underwriters (the “Underwriters”) led by Scotiabank, BMO Capital Markets and CIBC Capital Markets pursuant to which the Company will issue from treasury, and the Underwriters will purchase on a bought deal basis, 8,446,000 common shares (the “Shares”) at a price of C$29.60 per Share for gross proceeds to the Company of approximately C$250 million (the “Offering”).
The Company has also granted to the Underwriters an over-allotment option to purchase up to an additional 1,266,900 Shares at a price of C$29.60 per Share, representing 15% of the size of the Offering. The over-allotment option may be exercised until 30 days following the closing of the Offering. The Shares will be offered by way of a short form prospectus in each of the provinces and territories of Canada. The Shares may also be offered by way of private placement in the United States pursuant to applicable registration exemptions.
The Company intends to use the net proceeds of the Offering to reduce the outstanding balance under its revolving senior credit facility. This is expected to strengthen NFI’s balance sheet, reduce leverage and interest expense and significantly increase liquidity. NFI believes that this will provide the Company with additional financial flexibility to pursue its operational and strategic goals, such as investments in NFI’s zero-emission products and electric propulsion technology, investments required under the previously disclosed NFI Forward cost-reduction initiative and other potential growth opportunities.
The Company also announced that it expects Adjusted EBITDA1 for the fiscal year ending December 27, 2020 to be near the high end of its previously announced guidance of US$145 million to US$155 million. The Company cautions that this indication is preliminary, unaudited and subject to change as management completes its year-end financial procedures. NFI plans to announce its fourth quarter and 2020 year-end results on March 4, 2021 prior to market open.
“NFI is on a strong path to recovery that is expected to deliver growth and profitability as we lead the transition to a cleaner, more efficient zero-emission future. While the COVID-19 pandemic has had a dramatic impact on NFI’s customers and our business, we saw a strong finish to 2020 and anticipate Adjusted EBITDA will be in-line with our expectations,” said Paul Soubry, President and CEO. “Today’s financing will help strengthen our balance sheet and provide us with flexibility to capitalize on opportunities, both internal and external, to best position NFI for the future.”
The Offering is expected to close on or about March 1, 2021 and is subject to customary regulatory approvals, including the approval of the Toronto Stock Exchange and applicable securities regulatory authorities.
This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.
NFI is a leading independent global bus manufacturer providing a comprehensive suite of mass transportation solutions in ten countries under brands: New Flyer® (heavy-duty transit buses), Alexander Dennis Limited (single and double-deck buses), Plaxton (motor coaches), MCI® (motor coaches), ARBOC® (low-floor cutaway and medium-duty buses), and NFI Parts™. NFI vehicles incorporate the widest range of drive systems available including: clean diesel, natural gas, diesel-electric hybrid, and zero-emission electric (trolley, battery, and fuel cell). In total, NFI now supports over 105,000 buses and coaches currently in service around the world.
Leveraging 450 years of combined experience, NFI is leading the battery-electric transition of mass mobility around the world. With zero-emission buses and coaches, infrastructure, and technology, NFI meets today’s urban demands for scalable smart mobility solutions. Together, NFI is enabling more livable cities through connected, clean, and sustainable transportation.
For further information, please contact:
Group Director, Treasury, Corporate Development, and Investor Relations