KP Tissue Inc. completed its initial public offering of 8,000,000 common shares at a price of $17.50 per share resulting in gross proceeds of $140 million (the “Offering”). The proceeds were used to subscribe for 8,000,000 units of Kruger Products L.P., representing a 15.7 per cent interest in Kruger Products. Kruger Products is Canada's leading manufacturer of tissue products. The remaining 83.3 per cent interest in Kruger Products is held indirectly by Kruger Inc.
The transaction structure involved a series of agreements governing the relationship between KP Tissue, Kruger Products and Kruger, including an exchange agreement to allow Kruger to exchange its units in Kruger Products for common shares in KP Tissue.
The Offering was made through a syndicate of underwriters led by Scotia Capital Inc. as sole bookrunner, National Bank Financial Inc., RBC Dominion Securities Inc. and TD Securities Inc., and also included CIBC World Markets Inc., Desjardins Securities Inc., HSBC Securities (Canada) Inc. and Canaccord Genuity Corp. (the “Underwriters”).
The Underwriters were also granted an over-allotment option to purchase from the Corporation up to an additional 1,200,000 common shares of the Corporation, exercisable for a period of 30 days from the closing of the Offering. If the over-allotment option is exercised, the Corporation will use the proceeds from the sale of these additional shares to subscribe for additional units of KPLP, which will result in the Corporation having up to a 17.6 per cent interest in KPLP.
The Corporation and its promoters, Kruger Inc. and KPLP, were represented by a McCarthy Tétrault LLP team comprising Iain Scott, Max Rogan, Fraser Bourne, Jane Askeland, David Letourneau and Alicia De Praeter (corporate and securities); Robert Doyle and Marie-France Gagnon (financial services); Christian Meighen and Annie Mailhot-Gamelin (tax); Mira Gauvin and Cindy Vaillancourt (environment); Stéphanie Gilcher and Craig Shirreff (real estate) and Michel Bergeron (translation).
The Underwriters were represented by a team from Stikeman Elliott LLP comprising D'Arcy Nordick, Kevin Smyth, Ruth Elnekave and Warren Ng (corporate and securities) and David Massé (corporate) and Katy Pitch (tax).