Dorel Continues Push into Latin America
Montreal, Quebec - 9/25/2012
Dorel Industries Inc. (TSX: DII.B, DII.A) today announced that it is further increasing its presence in Latin America by acquiring a 70% interest in two juvenile product businesses that sell to customers in Colombia and Central America. The acquisition will expand Dorel’s ownership of the highly popular Infanti brand to which Dorel already owns the rights in Chile, Bolivia, Peru and Argentina.
Dorel will operate Best Brands Group SA (“Best Brands”), in Panama and Baby Universe SAS (“Baby Universe”) in Colombia. The remaining 30% interest will be held by the Sitnisky family and the current owners of the newly acquired operations. The Sitniskys are Dorel’s current partners in Chile and Peru, holding 30% of Dorel’s operations there. With 2011 sales of US$14 million, the acquisition is expected to be immediately accretive to earnings. The purchase price was not disclosed.
“With a population base nearing 130 million people, Colombia, Ecuador, Venezuela and Central America are growing markets in importance which offer mid-term potential from an emerging consumer base. This is another concrete step in the implementation of Dorel’s geographic expansion strategy to grow in new markets with good growth potential. Our Chilean acquisition has been very successful. This move will energize our momentum and accelerate our market share penetration in the near future. It also expands our footprint with the Infanti brand,” commented Martin Schwartz, President and CEO of Dorel.
“With the solid partnership that we have with the Sitnisky family together with Dorel’s resources and large scale, we firmly believe this is the right way to succeed in Latin America,” concluded Mr. Schwartz.
Dorel Industries Inc. (TSX: DII.B, DII.A) is a world class juvenile products and bicycle company. Now in its 50th year, Dorel creates style and excitement in equal measure to safety, quality and value. The Company’s lifestyle leadership position is pronounced in both its Juvenile and Bicycle categories with an array of trend-setting products. Dorel’s powerfully branded products include Safety 1st, Quinny, Cosco, Maxi-Cosi and Bébé Confort in Juvenile, as well as Cannondale, Schwinn, GT, Mongoose, IronHorse and SUGOI in Recreational/Leisure. Dorel’s Home Furnishings segment markets a wide assortment of both domestically produced and imported furniture products, principally within North America. Dorel has annual sales of US$2.4 billion and employs 5,000 people in facilities located in twenty-two countries worldwide.
Caution Regarding Forward Looking Statements
Certain statements included in this press release may constitute “forward-looking statements” within the meaning of applicable Canadian securities legislation. Except as may be required by Canadian securities laws, Dorel does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results could differ materially from Dorel’s expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. As a result, Dorel cannot guarantee that any forward-looking statement will materialize. Forward-looking statements are provided in this press release for the purpose of giving information about Management’s current expectations and plans and allowing investors and others to get a better understanding of Dorel’s operating environment. However, readers are cautioned that it may not be appropriate to use such forward- looking statements for any other purpose.
Forward-looking statements made in this press release are based on a number of assumptions that Dorel believed were reasonable on the day it made the forward-looking statements. Factors that could cause actual results to differ materially from the Company’s expectations expressed in or implied by the forward-looking statements include: general economic conditions; changes in product costs and supply channel; foreign currency fluctuations; customer and credit risk including the concentration of revenues with few customers; costs associated with product liability; changes in income tax legislation or the interpretation or application of those rules; the continued ability to develop products and support brand names; changes in the regulatory environment; continued access to capital resources and the related costs of borrowing; changes in assumptions in the valuation of goodwill and other intangible assets and subject to dividends being declared by the Board of Directors, there can be no certainty that Dorel’s Dividend Policy will be maintained. These and other risk factors that could cause actual results to differ materially from expectations expressed in or implied by the forward-looking statements are discussed in Dorel’s annual MD&A and Annual Information Form filed with the applicable Canadian securities regulatory authorities. The risk factors outlined in the previously mentioned documents are specifically incorporated herein by reference.
Dorel cautions readers that the risks described above are not the only ones that could impact it. Additional risks and uncertainties not currently known to Dorel or that Dorel currently deems to be immaterial may also have a material adverse effect on our business, financial condition or results of operations. Given these risks and uncertainties, investors should not place undue reliance on forward- looking statements as a prediction of actual results.
Except as otherwise indicated, forward-looking statements do not reflect the potential impact of any non-recurring or other unusual items or of any dispositions, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after the date hereof. The financial impact of these transactions and non-recurring and other unusual items can be complex and depends on the facts particular to each of them. Dorel therefore cannot describe the expected impact in a meaningful way or in the same way Dorel presents known risks affecting the business.