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Groupe Dynamite Inc. (TSX: GRGD) said 4370368 Canada Inc., a company controlled by Chief Executive Officer Andrew Lutfy, intends to offer for resale 2,700,000 subordinate voting shares at $93.00 per share, for aggregate gross proceeds of approximately $251 million.
The offering is being conducted by a syndicate of underwriters led by BMO Capital Markets as lead joint bookrunner and manager, with Desjardins Capital Markets, National Bank Capital Markets, RBC Capital Markets and TD Securities as joint bookrunners. It will be made on a bought deal basis under a short form base shelf prospectus dated as of the date of the announcement, with a prospectus supplement to be filed no later than April 22, 2026.
Groupe Dynamite will not receive any proceeds from the sale of the offered shares by the selling shareholder.
The underwriters have also been granted an over-allotment option to purchase up to an additional 15% of the offered shares sold, at the same offering price. The option may be exercised for 30 days from the closing date. The offering is expected to close on April 27, 2026.
Concurrently with the closing of the offering, Groupe Dynamite agreed to repurchase for cancellation subordinate voting shares from the selling shareholder at the offering price. The buyback is for total consideration of approximately $51 million.
The company said the buyback represents approximately 2.6% of all current subordinate voting shares outstanding and 0.5% of all current shares outstanding.
The selling shareholder is controlled directly or indirectly by Andrew Lutfy, who holds multiple voting shares entitling him to more than 10% of the voting rights attached to all issued and outstanding shares of Groupe Dynamite. As a result, the buyback is a related-party transaction under Multilateral Instrument 61-101.
To review and evaluate the buyback, the board established a special committee of independent directors. Following the committee’s recommendation, the buyback was unanimously approved by the board, with Messrs. Lutfy and Iliopoulos abstaining.
The company said it is exempt from formal valuation and minority approval requirements under MI 61-101 because neither the fair market value of the subject matter nor the fair market value of the consideration represents more than 25% of the company’s market capitalization.
Groupe Dynamite also said it did not file a material change report at least 21 days prior to the closing of the buyback, which it described as reasonable because the definitive terms—including the purchase price, set with reference to the offering price—were finalized shortly after the offering terms.
Before the offering, the selling shareholder owned 88,615,622 multiple voting shares and 4,000,000 subordinate voting shares, for a total of 92,615,622 shares, representing approximately 84.4% of all outstanding shares and approximately 98.1% of the voting rights.
Immediately after the offering, after the effects of the buyback and assuming the over-allotment option is not exercised, the selling shareholder is expected to own 88,615,622 multiple voting shares and 750,000 subordinate voting shares, for 89,365,622 shares in total—approximately 81.9% of all outstanding shares and approximately 97.8% of voting rights.
If the over-allotment option is exercised, the selling shareholder is expected to own 88,615,622 multiple voting shares and 345,000 subordinate voting shares, for 88,960,622 shares in total—approximately 81.5% of all outstanding shares and approximately 97.8% of voting rights.
The shelf prospectus has been filed and the prospectus supplement will be filed in all provinces and territories of Canada. The offered shares may also be offered in the United States through private placement. Copies of the shelf prospectus and the prospectus supplement are available through the company’s profile on SEDAR+.
The company noted that the securities offered have not been registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption.
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