Savaria said the acquisition will create combined annual revenues of more than $671-million.
Laval-based Savaria Corp., (SIS-T) a company that makes accessibility equipment such as wheelchair lifts and home elevators, is buying Swedish company Handicare Group AB for $521-million, roughly doubling its annual sales and making it a top player in an expanding market.
Handicare manufactures stairlifts, walkers and other mobility-assistance products, complementing Savaria’s line of elevator and wheelchair platform lifts, the company said in a press release. The combined company will have approximately 2,300 employees across five continents.
“People throughout the world are aging and in need of equipment that gives them independence and ways to stay in their homes longer,” Savaria chief executive Marcel Bourassa said in the release. “Together, we will be well-positioned to become a world-leading company to answer the needs of this growing market.”
Savaria will buy all of Handicare’s stock for 50 Swedish krona, or $7.69 per share. Handicare shares, which trade on the Nasdaq Stockholm AB exchange, jumped nearly 20 per cent on Thursday, closing at 49 krona, or $7.54 a share. Savaria shares rose more than 9 per cent at the close on Thursday, landing at $17.69.
Handicare’s board has recommended that its shareholders approve the offer, which is expected to close during the second quarter this year. Handicare’s largest shareholder, Cidron Liberty Systems S.à r.l., which owns 62.9 per cent of its shares, has told Savaria that it supports the offer.
Savaria said the acquisition would be immediately accretive, creating combined annual revenues of more than $671-million. Savaria says it expects its 2020 revenue to be approximately $354-million, a 5-per-cent decrease from 2019.
Savaria will finance the deal through a combination of debt and equity. It secured $600-million in credit facilities from National Bank of Canada, and will issue $122-million in subscription receipts to underwriters National Bank Financial, Desjardins Capital Markets, Scotiabank and TD Securities. Each receipt will convert into one $15 share of Savaria.
Pension fund giant Caisse de dépôt et placement du Québec will buy an additional $69-million of subscription receipts at the offering price.
“We are delighted to support the international expansion strategy of Savaria, a Quebec manufacturer that has recorded significant growth over the years,” Kim Thomassin, head of Quebec investments at the Caisse, said in the Savaria news release.
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Jaren Kerr