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Golf Town Canada, Golfsmith International to sell C$150 million five-year notes
By Cristal Cody
Prospect News, July 3 - Golf Town Canada Inc. and Golfsmith International Holdings, Inc. plan to hold a roadshow the week of July 9 for a high-yield offering of C$150 million of senior second-lien notes, an informed bond source said on Tuesday.
The offering includes 150,000 units each comprised of C$700 of senior second-lien notes from Golf Town Canada and C$300 of senior second-lien notes from Golfsmith International.
The roadshow will be held in New York on Monday and in Toronto on July 10 and July 11. Pricing is expected late in the July 9 week.
Scotia Capital Inc., TD Securities Inc. and BMO Capital Markets Corp. are the bookrunners. Co-managers are HSBC Capital (Canada) Inc. and National Bank Financial Inc.
The notes are being offered on a private placement basis in Canada and the United States.
The issue is guaranteed by Golf Town Canada Holdings Inc., Golf Town USA Holdings Inc., the issuers, Golf Town USA Inc. and existing restricted subsidiaries and certain future restricted subsidiaries.
The notes are non-callable for two years. In 2014, the notes may be called at par plus ½ the coupon, in 2015 at par plus ¼ the coupon and 2016 and thereafter at par.
The notes have a 101% change-of-control put; an equity clawback of up to 35% in the first two years at par plus the coupon; and a Canadian call at the Canada Bond Yield plus 50 basis points.
Proceeds will be used to repay debt, to replace the existing Golfsmith ABL facility and to return capital to shareholders.
The deal comes as Golf Town plans to acquire U.S. specialty golf retailer Golfsmith International for $6.10 a share, an acquisition that will make it the world's largest specialty golf retailer with 143 stores in Canada and the United States.
Markham, Ont.-based Golf Town is owned by Omers Private Equity. Austin, Texas-based Golfsmith is a 40-year specialty golf retailer.
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