MONTREAL - Publicly traded Canadian furniture giant Dorel Industries has announced it will go private after making a deal to sell to a group of buyers made up of family owners, Dorel management, and Cerberus Capital Management.
 
The offer values the company at approximately $470 million. Dorel, ranked #16 on the current FDMC 300, manufactures ready-to-assemble home furniture, car seats, strollers, and bicycles.
 
The family shareholders - Martin Schwartz, Jeffrey Schwartz, Alan Schwartz and Jeff Segel - control around 19 percent of the company's outstanding shares on an economic basis, and around 60 percent on a voting basis. They say they're not interested in selling their interests in Dorel or any of the company's business segments.
 
The buyer group has been granted exclusivity through November 10 to complete negotiations.
 
The stock gained nearly 5 percent after the announcement.
 
Dorel Industries Inc. consists of three main business segments: Dorel Juvenile, Dorel Home and Dorel Sports.
 
The company was negatively affected at the early stages of the COVID pandemic, but has since posted recoveries. 
 
Dorel Industries Inc.’s sports and home divisions got a boost from COVID-19 lockdowns during the second quarter. The strong showing of those two divisions more than offset losses sustained by Dorel’s juvenile segment.

Dorel Home, buoyed by strong online sales during the onset of the coronavirus lockdown, posted its best quarter ever in terms of both record revenue and adjusted operating profit. Q2 revenue soared 25.7% to US$260.7 million. The company said e-commerce sales represented 68% of total gross sales compared to 60% in the prior year.

 
Dorel Juvenile sustained a Q2 operating loss of US$1.2 million compared to a profit of US$2.4 million last year. Q2 revenue declined US$43.9 million or 19.8% to US$177.6 million. 
 
“Dorel’s overall revenues have recovered sharply from the initial negative effects of COVID-19 with strong performances in two of our three segments,” said CEO Martin Schwartz. “Dorel Sports and Dorel Home benefitted from increased demand for its products as consumers sought bicycles and home furnishing products during the prolonged lockdown periods. Increased sales of in-stock items allowed both segments to reduce inventory to record low levels. Dorel Juvenile remained challenged through the first half of the quarter, hurt by continuing store closures in many of its markets, a situation which began reversing as more stores reopened during the latter part of the period.”

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