(NYSE: CAE; TSX: CAE) - CAE Inc. (“CAE” or the
“Corporation”) today announced that it has entered into an
agreement with Scotia Capital Inc. RBC Dominion Securities Inc. and
TD Securities Inc., on behalf of a syndicate of underwriters
(collectively, the “Underwriters”), pursuant to which the
Corporation will issue from treasury, and the Underwriters shall
purchase on a “bought deal” basis, 10,060,000 common shares
(the “Shares”) at a price of $29.85 per Share (the “Offer
Price”) for gross proceeds to the Corporation of approximately $300
million (the “Offering”).
In addition, CAE has entered into an agreement
under which the Corporation will complete a private placement in
Canada of common shares at the Offer Price with Caisse de dépôt et
placement du Québec (“CDPQ”), for aggregate gross proceeds to the
Corporation of approximately $150 million (the “Private
Placement”).
CAE intends to use the net proceeds of the
Offering and the concurrent Private Placement for general corporate
purposes, including to fund future potential acquisition and growth
opportunities. This will include the funding of the acquisition of
Flight Simulation Company B.V., which was also announced today by
way of a separate press release. Pending such uses, CAE intends to
invest the net proceeds from the Offering, hold them as cash or
cash equivalents, or repay indebtedness outstanding under its
credit facilities, which may be withdrawn again as opportunities
arise.
The Underwriters have been granted an
over-allotment option (the “Over-Allotment Option”), exercisable in
whole or in part on the same terms as the Offering for a period of
30 days from the closing of the Offering, to issue additional
Shares, representing up to 15% of the number of common shares sold
pursuant to the Offering, for additional gross proceeds of up to
$45 million.
The Shares issued pursuant to the Offering and
Over-Allotment Option will be offered in all provinces of Canada by
way of a prospectus supplement (the “Prospectus Supplement”) to a
short form base shelf prospectus (the “Final Base Shelf
Prospectus”). CAE has filed a registration statement on Form F-10,
and will file the Prospectus Supplement, with the U.S. Securities
and Exchange Commission (the “SEC”) in accordance with the
multi-jurisdictional disclosure system established between Canada
and the United States (“MJDS”).
The Corporation has filed a preliminary short
form base shelf prospectus (the “Preliminary Base Shelf
Prospectus”) and is filing today a concurrent preliminary
prospectus supplement with Canadian Securities Commissions and with
the SEC in accordance with the MJDS, in order to qualify the Shares
to be issued pursuant to the Offering described above. Such
Preliminary Base Shelf Prospectus, which remains subject to the
review of the Canadian Securities Commissions will qualify the
distribution by way of prospectus in Canada of up to $2 billion of
common shares, debt securities, preferred shares, warrants, share
purchase contracts, subscription receipts, units or any combination
thereof, during the 25-month period during which the Final Base
Shelf Prospectus will be effective.
The issuance of the common shares pursuant to
the Offering and the Private Placement is subject to customary
approvals of applicable securities regulatory authorities,
including the Toronto Stock Exchange and the New York Stock
Exchange. Closing of the Offering and the Private Placement are
expected to occur concurrently on or about November 30, 2020 (the
“Closing Date”). Closing of the Offering is conditional upon the
closing of the Private Placement and closing of the Private
Placement is conditional on the closing of the Offering.
This press release does not constitute an offer
to sell or the solicitation of an offer to buy the common shares,
nor shall there be any sale of these securities in any state or
jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
Prospective investors should read the Final Base
Shelf Prospectus, Prospectus Supplement and the documents
incorporated by reference therein before investing in the common
shares. These documents may be accessed for free by visiting SEDAR
at www.sedar.com.
CAE has filed a registration statement
(including a prospectus) with the SEC for the offering to which
this communication relates. Before you invest, you should read the
prospectus supplement relating to this offering, the prospectus in
that registration statement and other documents CAE has filed with
the SEC for more complete information about CAE and this offering.
You may get these documents for free by visiting EDGAR on the SEC
Web site at www.sec.gov. Alternatively, you may request the
prospectus supplement and prospectus in Canada from Scotia Capital
Inc., Attention: Equity Capital Markets, Scotia Plaza, 62nd Floor,
40 King Street West, Toronto, Ontario M5H 3Y2, or by telephone
at 1-416-863-7704 or by email at equityprospectus@scotiabank.com
and in the United States from Scotia Capital (USA) Inc., Attention:
Equity Capital Markets, 250 Vesey Street, 24th Floor, New York, New
York, 10281, or by telephone at 1-212-225-6853 or by email at
equityprospectus@scotiabank.com; from RBC Dominion Securities Inc.,
Attention: Distribution Centre, 180 Wellington Street West, 8th
Floor, Toronto, Ontario M5J 0C2, or by telephone at
1-416-842-5349, or by email at Distribution.RBCDS@rbccm.com and in
the United States from RBC Capital Markets, LLC, Attention: Equity
Syndicate, 200 Vesey Street, 8th Floor, New York, NY 10281, or by
telephone at 1-877-822-4089, or by email at
equityprospectus@rbccm.com; or from TD Securities Inc., Attention:
Symcor, 1625 Tech Avenue, Mississauga, Ontario L4W 5P5, or by
telephone at 289-360-2009 or by email at sdcconfirms@td.com and in
the United States from TD Securities (USA) LLC, 31 W 52nd Street,
New York, NY 10019 or by telephone at 212-827-7392. The content of
any referenced websites and other electronic links is not
incorporated by reference herein or in any report or document filed
with the SEC.
About CAE CAE is a high
technology company, at the leading edge of digital immersion,
providing solutions to make the world a safer place. Backed by a
record of more than 70 years of industry firsts, we continue to
reimagine the customer experience and revolutionize training and
operational support solutions in civil aviation, defence and
security, and healthcare. We are the partner of choice to customers
worldwide who operate in complex, highstakes and largely regulated
environments, where successful outcomes are critical. Testament to
our customers’ ongoing needs for our solutions, over 60 percent of
CAE’s revenue is recurring in nature. We have the broadest global
presence in our industry, with approximately 10,000 employees, 160
sites and training locations in over 35 countries. www.cae.com
Caution concerning forward-looking
statements This press release includes forward-looking
statements about the Offering and the Private Placement, including
in respect of the use of proceeds from the Offering and the Private
Placement and the expected Closing Date and the expected closing
date of the Private Placement, and the Corporation’s activities,
events and developments that the Corporation expects to or
anticipates may occur in the future including, for example,
statements about the Corporation’s vision, strategies, market
trends and outlook, future revenues, capital spending, expansions
and new initiatives, financial obligations and expected sales.
Forward-looking statements normally contain words like “believe”,
“expect”, “anticipate”, “plan”, “intend”, “continue”, “estimate”,
“may”, “will”, “should”, “strategy”, “future” and similar
expressions. By their nature, forward looking statements require
the Corporation to make assumptions and are subject to inherent
risks and uncertainties associated with the Corporation’s business
which may cause actual results in future periods to differ
materially from results indicated in forward-looking statements.
While these statements are based on management’s expectations and
assumptions regarding historical trends, current conditions and
expected future developments, as well as other factors that the
Corporation believes are reasonable and appropriate in the
circumstances, readers are cautioned not to place undue reliance on
these forward-looking statements as there is a risk that they may
not be accurate.
Important risks that could cause such
differences include, but are not limited to, the failure to receive
regulatory approvals (including stock exchange) or otherwise
satisfy the conditions to the completion of the Offering and the
Private Placement or delay in completing the Offering and the
Private Placement and the funds thereof not being available to CAE
in the time frame anticipated or at all, the occurrence of an event
which would allow the Underwriters to terminate their obligations
under the Underwriting Agreement to be entered into by the
Corporation and the Underwriters in connection with the Offering or
which would allow CDPQ to terminate its obligations under the
Subscription Agreement entered into by the Corporation and CDPQ in
connection with the Private Placement, risks relating to the
COVID-19 pandemic such as health and safety, reduction and
suspension of operations, global economic conditions, diversions of
management attention, heightened IT risks, liquidity risks and
credit risks, risks relating to the industry such as competition,
business development and awarding of new contracts, level and
timing of defence spending, government-funded defence and security
programs, constraints within the civil aviation industry,
regulatory matters, natural or other disasters, environmental laws
and regulations, climate change, risks relating to CAE such as
evolving standards and technology innovation, the Corporation’s
ability to penetrate new markets, R&D activities, fixed-price
and long term supply contracts, strategic partnerships and
long-term contracts, procurement and original equipment
manufacturer (OEM) leverage, product integration and program
management, protection of the Corporation’s intellectual property
and brand, third-party intellectual property, loss of key
personnel, labour relations, liability risks that may not be
covered by indemnity or insurance, warranty or other
product-related claims, integration of acquired businesses through
mergers, acquisitions, joint ventures, strategic alliances or
divestitures, reputational risk, U.S. foreign ownership, control or
influence mitigation measures, length of sales cycle, seasonality,
continued returns to shareholders, information technology and
cybersecurity, the Corporation’s reliance on technology and third
party providers, data privacy, and risks relating to the market
such as foreign exchange, availability of capital, credit risk,
pension plan funding, doing business in foreign countries,
geopolitical uncertainty, anti-corruption laws and taxation
matters. Additionally, differences could arise because of events
announced or completed after the date of this press release. More
information about the risks and uncertainties affecting CAE’s
business can be found in the Management’s Discussion & Analysis
for the year ended March 31, 2020 and the Management’s Discussion
& Analysis for the quarter ended September 30, 2020. Any one or
more of the factors described above and elsewhere in this press
release, and in the documents referenced herein, may be exacerbated
by the continuing COVID-19 pandemic and may have a more negative
impact on CAE’s business, results of operations and financial
condition. Accordingly, readers are cautioned that any of the
disclosed risks could have a material adverse effect on CAE’s
forward-looking statements. Readers are also cautioned that the
risks described above and elsewhere in this press release, and in
the documents referenced herein, are not necessarily the only ones
the Corporation faces; additional risks and uncertainties that are
presently unknown to the Corporation or that the Corporation may
currently deem immaterial may adversely affect CAE’s business.
Except as required by law, the Corporation
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise. The forward-looking information and
statements contained in this press release are expressly qualified
by this cautionary statement.
Material AssumptionsThe
forward-looking statements set out in this press release are based
on certain assumptions including, without limitation: the
satisfaction of all conditions of closing and the successful
completion of, each of the Offering and the Private Placement
within the anticipated timeframe, including receipt of regulatory
approvals (including stock exchange approvals), fulfillment by the
Underwriters of their obligations pursuant to the Underwriting
Agreement and by CDPQ of its obligations pursuant to the
Subscription Agreement, that no event will occur which would allow
the Underwriters to terminate their obligations under the
Underwriting Agreement, or which would allow CDPQ to terminate its
obligations under the Subscription Agreement, the anticipated
negative impacts of the COVID-19 pandemic on the Corporation’s
businesses, operating results, cash flows and/or financial
condition, including the intended effect of mitigation measures
implemented as a result of the COVID-19 pandemic, CAE’s available
liquidity from cash and cash equivalents, undrawn amounts on CAE’s
revolving credit facilities, the balance available under CAE’s
receivable purchase program, CAE’s cash flows from operations and
continued access to debt funding will be sufficient to meet
financial requirements in the foreseeable future; and no material
financial, operational or competitive consequences of changes in
regulations affecting CAE’s business. For additional information,
including with respect to other assumptions underlying the
forward-looking statements made in this press release, refer to the
applicable reportable segment in the Management’s Discussion &
Analysis for the year ended March 31, 2020 and the Management’s
Discussion & Analysis for the quarter ended September 30, 2020.
Given the impact of the changing circumstances surrounding the
COVID-19 pandemic and the related response from CAE, governments,
regulatory authorities, businesses and customers, there is
inherently more uncertainty associated with CAE’s assumptions.
Accordingly, the assumptions outlined in this press release, and in
the documents referenced herein, and, consequently, the
forward-looking statements based on such assumptions, may turn out
to be inaccurate.
CAE contacts:
General Media: Hélène V.
Gagnon, Vice President, Public Affairs and Global Communications
+1-514-340-5536, helene.v.gagnon@cae.com
Investor relations: Andrew
Arnovitz, Vice President, Strategy and Investor Relations
+1-514-734-5760, andrew.arnovitz@cae.com
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