Cara Operations completes C$200 mln IPO

Fri 10:26 am by Mourad Haroutunian

Cara Operations (TSE:CAO), a Canadian restaurant company with brands including Swiss Chalet and Harvey’s, raised C$200 million in its initial public offering.

The Toronto-based company closed its IPO of 8.7 million subordinate voting shares at C$23 each, according to a statement released today.

The net proceeds of the offering were used to repay indebtedness of the company, Cara said.

The subordinate voting shares are listed on the Toronto Stock Exchange under the symbol "CAO".

Upon closing of the offering, there are 10.2 million subordinate voting shares issued and outstanding, in addition to 37.4 million multiple voting shares, which are convertible into subordinate voting shares on a one-for-one basis.

The subordinate voting shares carry one vote per share.

The multiple voting shares, which are directly or indirectly owned by Fairfax Financial Holdings Limited and its subsidiaries and members of the Phelan family, carry 25 votes per share.

The offering was made through a syndicate of underwriters led by Scotia Capital, BMO Capital Markets and RBC Capital Markets (acting as joint book-runners) and including CIBC World Markets, TD Securities, National Bank Financial, Canaccord Genuity, GMP Securities, Raymond James, Cormark Securities and Laurentian Bank Securities.

The company has granted the underwriters an over-allotment option to purchase up to 1,305,000 additional subordinate voting shares, being 15 percent of the number of subordinate voting shares issued in the offering.

Following completion of the offering, Fairfax and members of the Phelan family continue to hold 37.4 million multiple voting shares representing approximately 79 percent of the company's total issued and outstanding shares.

Cara is returning to the stock markets 11 years after the Phelans took the business private to narrow the company’s focus on restaurants.

Cara has 837 restaurants across Canada and 10 brands including Milestones, Kelsey’s, Bier Markt and East Side Mario’s, according to filings.

The Phelans founded the business in 1883 as Canada Railway News Company Ltd. to sell newspapers, food, snacks and supplies to travellers on railways and steamships in southern Ontario.

Cara, which expanded into hotels, restaurants, airline catering and specialty coffee through the 1900s, was listed on the Toronto Stock Exchange from 1968 to 2004. Fairfax stepped in as an investor in October 2013.