(Bloomberg) -- Sleep Country Canada Holdings Inc. is talking to investors about a potential Canadian-dollar bond sale to help finance its C$1.7 billion acquisition by Fairfax Financial Holdings Ltd. in what would be a rare leveraged buyout funded by loonie-denominated bonds, according to a person with knowledge of the matter.
The Canadian mattress retailer is holding a call for fixed-income investors on Wednesday, organized by National Bank Financial Markets and Scotia Capital, Bloomberg reported earlier. The company is expected to receive at least one credit rating that’s below investment grade, according to the person, who asked not to be identified discussing private matters.
Leveraged buyouts have been uncommon in Canada in recent years, and those funded by loonie-denominated junk bonds are even rarer — data compiled by Bloomberg show none of the latter. Representatives for National Bank, Scotia, and Fairfax Financial weren’t able to comment.
Sleep Country is the latest of a string of retail stores and consumer brands that Fairfax Financial has recently acquired control of, including a hockey equipment maker and a restaurant company.
Sleep Country said in early October that it completed its sale to Fairfax at C$35 per share. The C$1.7 billion figure represents the enterprise value of the transaction.
(Updates with detail on Sleep Country sale in fifth paragraph)
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