Amer Sports, Inc. Announces Pricing and Upsize of Proposed Senior Secured Notes Offering

Rhea-AI Summary

Amer Sports, Inc., a global group of iconic sports and outdoor brands, announced an upsized offering of $800 million aggregate principal amount of 6.75% senior secured notes due 2031. The offering reflects a $200 million increase from the previously announced size. The net proceeds will be used to repay outstanding indebtedness under existing credit facilities and bilateral credit facility.

Financial Analyst

The upsizing of Amer Sports' offering from $600 million to $800 million in senior secured notes is a significant move, indicating a strong investor appetite for the company's debt securities. The 6.75% interest rate is competitive and may reflect the company's creditworthiness and market conditions. This strategic refinancing could improve Amer Sports' debt profile by extending maturities and reducing the cost of capital, potentially freeing up cash flows for future investments or operations.

However, investors should be mindful of the associated risks, such as the company's ability to generate sufficient cash flow to service the new debt, especially in the context of the broader economic environment and the sports and outdoor industry. The use of proceeds to repay existing indebtedness is a common practice, but it's essential to analyze the company's long-term financial strategy to understand the potential impact on its leverage and liquidity ratios.

Legal Expert

The private nature of the offering and its exemption from registration under the Securities Act of 1933 indicates a targeted approach towards qualified institutional buyers and non-U.S. persons. This limits the potential investor base but also simplifies the compliance requirements for Amer Sports. The fact that the notes are secured by liens on the same assets as the New Senior Secured Credit Facilities could provide a layer of protection for investors, but it's important to assess the quality and liquidity of the underlying collateral.

Furthermore, the guarantees by Amer Sports' subsidiaries introduce an additional layer of security for the debt holders, although this also means that the subsidiaries' financial health becomes a critical factor for the overall credit risk. Prospective investors should conduct due diligence on the enforceability of these guarantees and the legal implications of the first-priority liens in various jurisdictions.

Market Research Analyst

The sports and outdoor industry has faced various challenges, including changing consumer preferences and economic fluctuations. Amer Sports' decision to refinance its debt could be indicative of a proactive approach to managing these industry-specific risks. The upsized offering suggests confidence among investors regarding the company's market position and brand portfolio.

It would be insightful to analyze the company's competitive landscape and the potential for growth in its various segments. The impact of the refinancing on Amer Sports' operational flexibility and its ability to invest in innovation or market expansion could be significant, influencing its long-term market share and profitability.

HELSINKI--(BUSINESS WIRE)-- Amer Sports, Inc. (“Amer Sports,” “we,” “us” or the “Company”), a global group of iconic sports and outdoor brands, announced today that its wholly-owned subsidiary, Amer Sports Company (the “Issuer”), has priced an upsized offering of $800 million aggregate principal amount of 6.75% senior secured notes due 2031 (the “Notes”) in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The size of the offering reflects an increase of $200 million in aggregate principal amount of the Notes from the previously announced offering size of $600 million. The Notes will be sold to investors at a price of 100% of the principal amount thereof and will bear an interest rate of 6.75% per annum.

The closing of the offering is expected to occur on February 16, 2024 subject to the satisfaction of customary closing conditions.

The net proceeds from the offering of the Notes, along with the expected net proceeds from the previously announced new $500 million USD term loan facility, new €700 million EURO term loan facility and borrowings under our previously announced new revolving credit facility (together, the “New Senior Secured Credit Facilities”), are expected to repay all outstanding indebtedness under the Company’s existing credit facilities, which will be terminated, and to repay all outstanding indebtedness under the Company’s existing $90 million bilateral credit facility.

The Notes will be, jointly and severally, unconditionally guaranteed on a senior secured basis by the Company and each of the Company’s subsidiaries (other than the Issuer) that is a borrower or a guarantor under the New Senior Secured Credit Facilities. The Notes and the related guarantees will be secured on a first-priority basis by liens on the same assets that secure the New Senior Secured Credit Facilities.

There can be no assurance that the Company will be able to successfully complete the transactions on the terms described above, or at all.

The Notes will not be registered under the Securities Act, or any state securities law and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act and applicable state securities laws. The Notes will be offered in the United States only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act.

This press release is being issued pursuant to Rule 135c under the Securities Act and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offers of the Notes will be made only by means of a private offering memorandum.

About Amer Sports, Inc.

Amer Sports is a global group of iconic sports and outdoor brands, including Arc’teryx, Salomon, Wilson, Peak Performance, and Atomic. Our brands are creators of exceptional apparel, footwear, equipment, protective gear, and accessories that we believe give our consumers the confidence and comfort to excel.

With over 10,800 employees globally, Amer Sports’ purpose is to elevate the world through sport and to inspire people to lead better, healthier lives. Our vision is to be the global leader in premium sports and outdoor brands. With corporate offices in Helsinki, Munich, Kraków, and Shanghai, we have operations in 41 countries and our products are sold in 100+ countries. Our revenue in 2022 was $3.5 billion.

Forward-looking Statements

This press release contains statements that constitute forward-looking statements, including, but not limited to, our financing plans and the details thereof, including the proposed use of proceeds therefrom, the New Senior Secured Credit Facilities and the details thereof, the expected timing of the borrowing of the New Senior Secured Credit Facilities and our ability to close such transaction, the offering of the Notes and the details thereof, and our ability to close such offering and the other expected effects of the financing. Many of the forward-looking statements contained in this press release can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified under in “Risk Factors” included in the preliminary offering memorandum for the offering of the Notes. Forward-looking statements speak only as of the date they are made, and Amer Sports and the Issuer do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of an unanticipated event.

Source: Amer Sports, Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240209911934/en/

Media:

Anu Sirkiä

Vice President, Communications

anu.sirkia@amersports.com

Investor Relations:

Omar Saad

Vice President, Finance and Investor Relations

omar.saad@amersports.com

Source: Amer Sports, Inc.

FAQ

What is the aggregate principal amount of the senior secured notes offered by Amer Sports, Inc.?

Amer Sports, Inc. has priced an upsized offering of $800 million aggregate principal amount of 6.75% senior secured notes due 2031.

What is the interest rate on the senior secured notes offered by Amer Sports, Inc.?

The senior secured notes offered by Amer Sports, Inc. will bear an interest rate of 6.75% per annum.

When is the closing of the offering of the senior secured notes expected to occur?

The closing of the offering of the senior secured notes is expected to occur on February 16, 2024, subject to customary closing conditions.

How will the net proceeds from the offering of the senior secured notes be utilized by Amer Sports, Inc.?

The net proceeds from the offering of the senior secured notes will be used to repay all outstanding indebtedness under the Company's existing credit facilities and bilateral credit facility.

Are the senior secured notes registered under the Securities Act?

The senior secured notes will not be registered under the Securities Act or any state securities law and may only be offered to qualified institutional buyers and non-U.S. persons.