Announces Expansion of Slate to Eight Highly
Qualified Director Candidates With Strong Track Records of Value
Creation, Expertise in Successful Succession Planning, and Relevant
Industry and Governance Experience
Informs Shareholders That Browning West Has
Requested the Special Meeting Be Held Without Delay
Urges Gildan’s Board to Respect the Will of
Shareholders and Not Employ Tactics to Unreasonably Delay Special
Meeting
Browning West, LP (together with its affiliates, “Browning West”
or “we”) is a significant, long-term shareholder of Gildan
Activewear Inc. (NYSE: GIL) (TSX: GIL) (“Gildan” or the “Company”),
beneficially owning approximately 5.0% of the Company’s outstanding
shares.
Today, Browning West issued a letter to shareholders announcing
that it has requisitioned a Special Meeting of Shareholders (the
“Special Meeting”) for the purpose of providing shareholders an
opportunity to reconstitute Gildan’s Board of Directors (the
“Board”). In the letter, Browning West disclosed that it has
expanded its slate of director candidates to eight members and is
now seeking to remove a majority of the sitting directors. The
Special Meeting is proposed to be convened without delay and will
allow shareholders to install the following highly qualified
individuals: Michael Kneeland, Glenn Chamandy, Michener Chandlee,
Ghislain Houle, Mélanie Kau, Peter Lee, Karen Stuckey, and J.P.
Towner. Browning West believes that significant change is urgently
needed at Gildan to protect long-term shareholder value.
The full text of today’s letter is below.
***
January 9, 2024
Fellow Shareholders,
Browning West is a significant and long-term shareholder of
Gildan, owning approximately 5.0% of the Company’s outstanding
shares. We are pleased to announce that we have delivered a request
to the Company to requisition a Special Meeting to be held without
delay, which will provide shareholders an opportunity to
reconstitute Gildan’s Board. It is critical that the Board hold the
Special Meeting expeditiously, because with each passing day the
current state of uncertainty is risking permanent damage to Gildan
stakeholders. As a reminder, since Mr. Chamandy’s termination,
Gildan’s stock has underperformed the most relevant index by 20%,
implying that each of the Company’s Board members is already
responsible for more than $1.2 billion USD of value
destruction.1
Browning West has expanded its slate and is now seeking
majority change in Gildan’s boardroom because new information has
come to light in recent days indicating that the Board is deeply
entrenched and is entirely unresponsive to shareholder
demands.
We would like to explain the reasons why we have expanded our
slate from five to eight director candidates, which would represent
a majority of the Board. Browning West and eight other independent
shareholders, representing approximately 35% of Gildan’s
outstanding shares, have expressed substantial concern over the
Board’s actions and called for the immediate reversal of the
Board’s significant missteps. Despite the unprecedented magnitude
of shareholder demands, recent communications with the Board’s
representatives and the Board’s own public statement have made it
clear that the Board is far more entrenched than we had previously
imagined. The urgent need for even more substantial change became
apparent once we learned that the Board unanimously: (i) will not
consider the reinstatement of Glenn Chamandy as CEO, (ii) is
committed to appointing Vincent Tyra to the CEO role, and (iii) is
not willing to reconstitute the Board in a credible manner.
Furthermore, we learned that the Board intends to (i) employ
extreme delay tactics by postponing its next Annual Meeting of
Shareholders and any Special Meeting requisitioned to as late as
Fall 2024 and (ii) deploy baseless litigation tactics against its
own shareholders. These disappointing tactics are designed to
divert focus from substantive issues while imposing significant
costs and hurdles on concerned shareholders so they abandon their
campaigns to protect shareholder value. We are not deterred by such
tactics and will continue to exert our rights and hold the Board
accountable for its failures. Finally, we are concerned that the
Board may bring forward Mr. Tyra’s start date. Such a move would
highlight the Board’s reckless disregard for shareholders who have
clearly rejected Mr. Tyra and his weak credentials.
Additionally, it is troubling that the Board deliberately
attempts to diminish Gildan’s strong historical results and growth
prospects:
- On December 20th the Board released a letter stating: “Over the
last four years, however, Mr. Chamandy has struggled to find
additional avenues of long-term organic growth.” However, the Board
neglects to mention that over the past four years Gildan has grown
earnings per share by 54% cumulatively, driven primarily by market
share gains despite a challenging economic environment.2
- On January 8th the Board released another letter stating: “…Mr.
Chamandy struggled to scale an increasingly complex
organization…resulting in an eight-year annual revenue growth rate
of less than one percent…” However, the Board appears to not
understand its own historical financial statements because in fact
over the past eight years Gildan has grown revenue by 3% annually
and grown earnings per share by 75% cumulatively.3
- We are particularly disturbed that the Board appears to be
contradicting its own prior public disclosures with respect to Mr.
Chamandy’s performance. For example, in his signed Chairman
Statement in the Company’s 2022 Annual Report dated February 23,
2023, Donald Berg writes: (i) “we are pleased
with our strong performance and strategic advancements
during 2022,” (ii) “Specifically, while the changing environment
over the past few years has made the apparel industry challenging,
our manufacturing capacity initiatives and vertical integration
give us the confidence that our capital investments are placing us in a position of strength to capitalize on
future growth opportunities,” and (iii) “As we enter the
second year of the GSG strategy, we are on a solid footing to build
on this past year’s accomplishments. The
combination of our focused strategy, competitive strengths, and
dedicated team positions us well to deliver long-term value to our
shareholders.” Mr. Berg’s praise of Mr. Chamandy’s
leadership was not isolated to the 2022 Annual Report; in his
signed 2021 Chairman Statement Mr. Berg wrote, “heading into the
next stage of our growth, we’re in a stronger
position than we’ve ever been” and in his signed 2020
Chairman Statement he wrote, “the Board has confidence that the
initiatives and decisions taken by the Company will continue strengthening Gildan’s competitive position
and drive future growth.” We remind shareholders that the
Board and Mr. Berg have a legal obligation and a duty to provide
accurate statements in their public disclosure documents. Did the
Board and Mr. Berg deliberately mislead shareholders over the prior
three years, or are they deliberately misleading shareholders
now?
The Board’s continued attempts to deliberately disparage the
Company’s historical performance and growth prospects are obviously
harmful to shareholders and are disrespectful not only to Mr.
Chamandy but also to employees, who have worked hard to put the
Company in a strong position. Browning West believes that under Mr.
Chamandy’s leadership Gildan is well positioned for strong earnings
growth over the coming years for the following reasons: (i) the
Company has demonstrated substantial market share gains in recent
quarterly results and is positioned for additional share gains,
(ii) Gildan’s end markets may currently be at a cyclical low point
and may rebound in coming periods, and (iii) we believe that the
business is poised to deliver the highest margins in its history as
certain cost headwinds abate. These factors suggest that it is
unlikely that the business would have little growth going forward,
and we are surprised that the Board does not appear to understand
the key drivers of its own business. We can only presume that the
Board is denigrating the Company’s historical results, future
prospects, and management team in order to justify its own
mishandled succession process.
Based on the latest disappointing information, the Board has
forced our hand, and we no longer believe that a minority slate is
sufficient to prevent the further destruction of shareholder value
and achieve our key objectives of: (i) appointing Mr. Kneeland as
independent, non-executive Chair, (ii) terminating Mr. Tyra’s
employment, (iii) appointing Mr. Chamandy as CEO, and (iv)
reassessing committee composition and committee chair roles.
To achieve these objectives, we will be seeking shareholder
support at the upcoming Special Meeting to:
- Remove eight of the incumbent directors – Donald Berg, Maryse
Bertrand, Marc Caira, Shirley Cunningham, Charles Herington, Luc
Jobin, Craig Leavitt, and Chris Shackelton – from Gildan’s Board;
and
- Appoint eight highly qualified director candidates – Michael
Kneeland, Glenn Chamandy, Michener Chandlee, Ghislain Houle,
Mélanie Kau, Peter Lee, Karen Stuckey, and J.P. Towner – to the
Board.
We believe installing
Browning West’s majority slate at the Special Meeting will help
protect Gildan and long-term shareholder value
Our director nominees possess strong track records of value
creation, expertise in successful succession planning, relevant
industry and governance experience, as well as proven management
and board service pedigrees in Canada and the U.S. Our slate looks
forward to eventually sharing its credible, value-enhancing
strategy for improving governance and delivering sustainable
growth. We greatly appreciate the substantial support received thus
far from investors who have publicly and privately supported our
slate of highly qualified director candidates.
Our eight highly qualified director candidates are:
- Michael Kneeland (U.S. Citizen), Non-Executive Chair and
Former Chief Executive Officer of United Rentals, Inc. (NYSE: URI),
is a renowned leader with an exceptional record of value creation
in a large and operationally complex business, experience
overseeing a robust executive development program and successful
CEO succession processes, and experience working with founders of
highly successful businesses. In our experience, the most effective
board Chairs are those individuals who have been successful CEOs in
their own executive careers. Former CEOs are able to more
effectively mentor current CEOs and their successors, as opposed to
those executives whose careers ended in a functional or divisional
role. His experience is highly relevant given the recently
mishandled CEO succession, which was overseen by the current
Board.
- Exceptional Record of Value Creation in a
Large and Operationally Complex Business: Mr. Kneeland
currently serves as the Non-Executive Chair of United Rentals, Inc.
(“United Rentals”), a nearly $50 billion USD enterprise value
equipment rental business with over $14 billion USD of revenue and
nearly $7 billion USD of EBITDA.4 Mr. Kneeland became Chair in May
2019, following his retirement as CEO. United Rentals stock has
returned 16x or 18% annualized over the past 16 years, generating
nearly $35 billion USD in value spanning Mr. Kneeland’s CEO and
Chair tenure at United Rentals from 2007 to today.5 Under Mr.
Kneeland’s leadership as CEO, United Rentals also invested over $10
billion USD in net capital expenditures and nearly $8 billion USD
in acquisitions which drove significant value creation.6 United
Rentals’ revenue, EBITDA, and free cash flow per share grew 2.5x,
3.8x, and 9.5x, respectively, during his CEO tenure.7 During his
tenure as CEO and Chair, United Rentals’ operating margins improved
over 1,000 basis points to over 28%, which is well above the 18 to
20% operating margins shareholders expect from Gildan.8 Mr.
Kneeland’s leadership achievements are profiled in the book
“Lessons from the Titans,” which highlights his team’s operational
excellence, kaizen mentality, and investment discipline. These
skills are directly relevant to Gildan’s operations.
- Experience Leading Successful CEO
Succession Processes: When he was CEO, Mr. Kneeland
carefully developed internal succession candidates, and in 2019 he
successfully transitioned the United Rentals CEO role to COO
Matthew Flannery. Since Mr. Flannery became CEO, United Rentals’
stock has returned 4.2x, or 36% annualized, continuing the
company’s strong track record of value creation.9
- Experience Working with Founders of
Successful Businesses: United Rentals was initially led by
its founders in the first six years of the company’s existence. Mr.
Kneeland had extensive experience working with these founders while
he was in a senior leadership position.
- Notable Leadership Roles: Mr.
Kneeland currently serves as Chair of Maxim Crane Works and as a
director on the board of American Tire Distributors, Inc. In 2015,
he was appointed to the National Advisory Board for the Johns
Hopkins Berman Institute of Bioethics.
- Glenn Chamandy (Canadian Citizen), Co-Founder and Former
Chief Executive Officer of Gildan, has a strong record of value
creation, an unrivaled understanding of Gildan’s low-cost
vertically integrated apparel manufacturing business model, and
experience leading a complex global business. His experience is
highly relevant given his role as Gildan’s CEO for almost 20
years.
- Strong Record of Value Creation:
Mr. Chamandy has over 40 years of experience leading Gildan, with
almost 20 years of experience serving as CEO. From 1998 to 2023,
Mr. Chamandy was responsible for delivering nearly 16% annual
growth in earnings-per-share. During this time, Gildan’s stock
returned 99x, or a nearly 20% annualized return, outperforming all
of Gildan’s competitors, many of which were forced to exit Gildan’s
market or were acquired by Gildan.10 Even through a challenging
economic environment, Mr. Chamandy enhanced market share and grew
EPS at Gildan by 54% in the past four years.11
- Unrivaled Understanding of Gildan’s
Low-Cost Vertically Integrated Apparel Manufacturing Business
Model: Mr. Chamandy devoted his entire career to building
Gildan into a low-cost, vertically integrated manufacturing
business, investing over $2 billion USD of capital expenditures
over the past 20 years.12 Much of Gildan’s success can be
attributed to the low-cost position, which Mr. Chamandy architected
and maintained for decades.
- Experience Leading a Complex Global
Business: Mr. Chamandy oversaw Gildan’s growth to over $3
billion USD of annual sales and over $700 million USD of EBITDA. He
led the expansion of Gildan’s operations into Central America and
Bangladesh.
- Notable Leadership Roles: In 2015,
Mr. Chamandy founded The Chamandy Foundation, a private family
foundation with a vision of improving the lives of the younger
generation, through funding areas such as health and wellness,
education, poverty, research, and the environment.
- Michener Chandlee (U.S. Citizen), Former Chief Risk Officer
for NIKE, Inc. (NYSE: NKE), Former Chief Financial Officer of
Fanatics Commerce, formerly Fanatics Inc., and Current Chief
Financial Officer of WHOOP, is a world-class finance leader with an
exceptional record of value creation in apparel businesses with
complex global supply chains. His experience is highly relevant
given his understanding of mass market apparel and global supply
chains in contrast to the Gildan Board which has no mass market
apparel experience.
- Extensive Expertise in Apparel and in
Complex Global Supply Chains: Mr. Chandlee has over two
decades of experience as a key finance leader managing complex
global supply chains at NIKE, Inc. (“Nike”) and Fanatics, Inc.
(“Fanatics”), both of which are large customers of Gildan. Mr.
Chandlee spent 18 years at Nike, the $159 billion USD enterprise
value global athletic footwear and apparel company, most recently
as the Vice President of Corporate Audit and Chief Risk Officer
from 2016 to 2019.13 At Nike he also held various senior global
roles, including Chief Financial Officer of Nike business units
including Mexico, Golf, Emerging Markets, North America, and Global
Brands and Marketplace. Mr. Chandlee also served as Chief Financial
Officer of Fanatics Commerce. Fanatics is a $31 billion USD
enterprise value digital sports platform that manufactures and
sells licensed sports gear, hard goods, and apparel.14 Mr. Chandlee
has an understanding of Gildan’s business model given Nike’s and
Fanatics’ commercial partnerships with Gildan. Mr. Chandlee’s
extensive experience managing complex global supply chains and his
knowledge of Gildan as a major customer would be highly relevant to
the Gildan Board.
- Exceptional Record of Value Creation in
Consumer Businesses: During Mr. Chandlee’s nearly four-year
tenure at Fanatics, the company’s enterprise value increased nearly
7x from $4.5 billion USD to $31 billion USD.15 During Mr.
Chandlee’s 18-year tenure at Nike, the stock returned 16x or 16%
annually, while the company’s revenue increased by 4x and EBITDA
increased by nearly 5x.16
- Experience Working with Founders of
Highly Successful Businesses: Mr. Chandlee has worked with
the boards and board committees of large-scale public and private
companies that were led by highly successful founders including
Nike, Fanatics, and WHOOP.
- Ghislain Houle (Canadian Citizen), Executive Vice-President
and Chief Financial Officer of Canadian National Railway Company.
(TSX: CNR), has extensive experience working in a large-scale and
operationally complex business, has a strong track record of value
creation, and has significant financial and capital allocation
expertise. His experience is highly relevant given the operational
complexity of Gildan’s business and the need for value creation
expertise on the Board.
- Significant Experience Leading a Large
Scale and Operationally Complex Business: Mr. Houle
currently serves as Executive Vice-President and Chief Financial
Officer of Canadian National Railway (“Canadian National”), a $94
billion USD enterprise value business based in Montreal, and the
fourth largest business in Canada by market capitalization.17 He
has over 26 years of experience at the company, having originally
joined in 1997. Canadian National is Canada’s largest railway,
operating a nearly 20,000-mile rail network serving Canada and the
Midwestern and Southern United States. The company employs nearly
25,000 people and delivers nearly 6 million carloads of freight
annually. Mr. Houle has a deep understanding of supply chains and
operational experience in the railroad industry and extensive
experience in financing, financial planning, strategy, mergers
& acquisitions, and implementation of enterprise-wide data
software systems.
- Strong Record of Value Creation Over
Nearly Three Decades: During Mr. Houle’s total tenure at
Canadian National from 1997 to today, the company’s stock has
returned 45x or 16% annualized.18 During Mr. Houle’s tenure as
Chief Financial Officer from July 2016 to today, the Company’s
market capitalization grew by nearly $35 billion USD.19 Over this
same time period, Canadian National has grown revenue nearly 40%
and grown free cash flow per share by nearly 65%.20
- Significant Financial and Capital
Allocation Expertise: As Chief Financial Officer, Mr. Houle
has responsibility for financial management, planning, and
reinvestment, among other responsibilities. Cumulatively over the
past 7.5 years, Canadian National has generated approximately $17
billion USD in free cash flow, invested approximately $16 billion
USD in capital expenditures, repurchased approximately $11 billion
worth of shares, and paid out nearly $9 billion USD in dividends.21
Mr. Houle has also played a leading role on Canadian National’s
Audit Committee during his CFO tenure.
- Mélanie Kau (Canadian Citizen), Chair of the Human Resources
and Corporate Governance Committee and former Lead Director of
Alimentation Couche-Tard Inc. (TSX: ATD), has extensive experience
working with the founders of highly successful businesses and has
led multiple successful CEO succession plans. Her experience is
highly relevant given the recently mishandled and abrupt CEO
transition overseen by Gildan’s Board.
- Extensive Experience Working with
Founders of Highly Successful Businesses: Since 2006, Ms.
Kau has served as a board director of Alimentation Couche-Tard Inc.
(“Couche-Tard”), a $67 billion USD enterprise value global
convenience store operator based in Laval, Canada with over $68
billion USD of revenue and nearly $6 billion USD of EBITDA.22
Couche-Tard employs 128,000 people and operates over 14,400
convenience stores spanning 25 countries all across the world.23
She is currently the Chair of the Human Resources and Corporate
Governance Committee and was previously Lead Director from 2017 to
2022. During Ms. Kau’s tenure, the company’s revenue and earnings
per share have grown 7x and 18x, respectively, while its stock has
returned 23x, or 21% annualized.24 Ms. Kau is also Chair of
Aéroports de Montréal, the private operator of Trudeau
International Airport (“YUL”) and Mirabel International Airport
(“YMX”). YUL is Canada’s third largest and busiest airport serving
over 20 million passengers annually. Ms. Kau served as Chair of
Governance and Human Resources Committee and worked with the
founding management team. During Ms. Kau’s tenure, the business has
increased revenue 1.9x and EBITDA 2.2x.25
- Successful Record of Managing CEO
Succession in Founder-Led Companies: As the Chair of Couche-
Tard’s Human Resources and Corporate Governance Committee, Ms. Kau
was responsible for the CEO transition in 2014 from the company’s
CEO and founder Alain Bouchard, who generated a 92x total return,
to COO Brian Hannasch.26 The transition was highly successful;
since Mr. Hannasch’s appointment as CEO, Couche-Tard’s stock has
returned 4.8x, or 18% annualized.27 Ms. Kau also led the most
recent CEO succession at Aéroports de Montréal in 2023 which
resulted in an external hire.
- Notable Executive and Leadership
Experience: Ms. Kau is the Chair and former President of
Mobilia Ltd., an independent family-owned retailer in Quebec, where
she was President from 1995 to 2011. Ms. Kau also served as the
Co-President of Le Naturiste Inc. from 2012 to 2015, a retail chain
located in Quebec. Ms. Kau has received several accolades for her
business acumen and entrepreneurship, including Canada’s Top 40
under 40 and the John Molson School of Business Award of
Distinction.
- Peter Lee (U.S. Citizen), Co-Founder and Partner of Browning
West, possesses extensive financial and capital allocation acumen,
experience leading public company CEO searches, and brings
substantial alignment with shareholders given that Browning West is
one of Gildan’s largest long-term shareholders. His experience is
highly relevant given the current Board has recently taken actions
that have destroyed substantial value for shareholders.
- Extensive Financial and Capital
Allocation Acumen and Prior Public Company Board Experience:
Mr. Lee is a Partner and Co-Founder of Browning West, where he
plays a leading role in investment research and capital allocation.
Mr. Lee previously served on the board of Countryside Partnerships
plc (“Countryside”), and he played a leading role in enabling the
merger of Countryside and Vistry Group plc to create the largest
homebuilder by volume in the U.K.28 Prior to joining Browning West,
Mr. Lee worked at Criterion Capital Management, Grey Mountain
Partners, and Lazard.
- Experience Leading Public Company CEO
Searches: The Partners of Browning West have co-led seven
CEO or Chair searches at public companies, including co-leading a
CEO search to resolve a weak succession plan at Countryside
Properties plc, where Mr. Lee served as a director. If appointed to
Gildan’s Board, Mr. Lee would harness all of Browning West’s
resources to assist Gildan with succession planning and other
matters.
- Strong Alignment with
Shareholders: If elected to the Board, Mr. Lee would bring a
shareholder perspective and strong alignment to the boardroom,
considering Browning West is one of Gildan’s top long-term
shareholders. Mr. Lee has been deeply involved in the firm’s
investment in Gildan, having conducted 46 meetings with senior
leadership and multiple visits to the Company’s manufacturing
sites.
- Karen Stuckey (U.S. Citizen), Former Senior Vice President
at Walmart Inc. (NYSE: WMT), has extensive experience in apparel,
led large-scale businesses with an international presence, and
operated within a low-cost business model. Her experience is highly
relevant given Gildan’s low-cost business model and the fact that
no current Gildan directors have mass market apparel
experience.
- Extensive Expertise in Apparel, Including
Private Label: Ms. Stuckey has nearly two decades of
experience as a senior leader at Walmart Inc. (“Walmart”), most
recently as Senior Vice President, Private Brand within the General
Merchandise segment. In this role, Ms. Stuckey led the development
of Walmart’s private label strategy across more than 100 verticals,
including apparel. It is noteworthy that she was responsible for
introducing Gildan private label products at Walmart. Ms. Stuckey
also served as President of the Casualwear Division of Hanesbrands
Inc. (NYSE: HBI) from 2000 to 2004, which was a competitor to
Gildan at the time.29 These experiences are highly relevant as she
can provide both a competitor’s and customer’s perspective on
Gildan and would be the first member of the Board with direct mass
market apparel product knowledge.
- Experience Operating Businesses of
Significant Scale: Ms. Stuckey oversaw a segment with over
$40 billion USD in annual revenues with full P&L responsibility
and led the development of strategy and operational execution.
Walmart operates more than 10,500 retail stores across 24 countries
and is the world’s largest private employer.
- Experience Operating Internationally with
a Global Supply Chain: Ms. Stuckey oversaw global operations
with a sourcing budget of over $20 billion USD and a supply chain
across multiple continents. Ms. Stuckey has direct experience
working in countries in which Gildan operates throughout Central
America and Asia.
- Operated Within a Low-Cost Business
Model: During a nearly two-decade career at Walmart, Ms.
Stuckey was steeped in a culture and operating model that
emphasized the importance of low-cost operations. The success of
Walmart’s low-cost model is widely considered one of the great case
studies in long-term value creation.
- J.P. Towner (Canadian Citizen), Former Chief Financial
Officer of Dollarama Inc. (TSX: DOL) and Current Chief Financial
Officer of RONA inc., has extensive experience working in low-cost
vertically integrated businesses focused on value-oriented consumer
products with successful founders and has a track record of
delivering strong financial results. His experience is highly
relevant given Gildan’s focus on vertical integration and
maintaining a low-cost advantage.
- Experience in Vertically Integrated
Businesses Focused on Value-Oriented Consumer Products: Mr.
Towner is the former Chief Financial Officer of Dollarama Inc.
(“Dollarama”), a $23 billion USD enterprise value vertically
integrated retailer focused on value-oriented products based in
Canada. Dollarama is vertically integrated through sourcing,
distribution, and retail and focuses on delivering the best value
to its customers in Canada, which is highly relevant to Gildan’s
own vertically integrated and low-cost business model. In addition
to its Canadian operations, Dollarama also operates a highly
successful multi-national strategy across four countries in Central
and South America. During Mr. Towner’s tenure, Dollarama’s revenue
grew at nearly 14% annually and earnings per share grew at nearly
25% annually. These strong operating results underpinned a total
return of 84% and an annualized return of 27% for Dollarama’s stock
during Mr. Towner’s tenure.30
- Track Record of Delivering Strong
Financial Results: Mr. Towner is a seasoned finance
executive with more than 15 years of experience in corporate and
financial strategy, capital markets, and risk management. As Chief
Financial Officer of Dollarama, Mr. Towner contributed to a highly
successful capital allocation strategy and returned significant
value to shareholders; in addition, he was instrumental in
improving Dollarama’s EBITDA margins. He currently serves as the
Chief Financial Officer of RONA inc. (“RONA”), one of Canada's
leading home improvement retailers, currently owned by a private
equity firm. RONA generated over $5 billion USD in revenue in 2022,
operating or servicing 425 corporate and affiliated dealer stores
with a team of 22,000 employees.31 Mr. Towner also spent five years
as Executive Vice-President and Chief Financial Officer of
Pomerleau Inc. (“Pomerleau”), one of the largest construction
companies in Canada, which generated nearly $2.4 billion USD in
revenue in 2021.32 During his tenure, he contributed to increasing
the revenue and profitability of Pomerleau’s operations by 3x and
5x, respectively. Additionally, Mr. Towner spent nearly 10 years
with BMO Capital Markets.
- Experience Working with Founders of
Highly Successful Businesses: Mr. Towner has worked
extensively with independent board members and board committees of
public and private companies, as well as representatives from the
founding families of Dollarama and Pomerleau.
We have urged the Board to refrain from taking further
entrenchment actions and not employ tactics to unreasonably delay
the Special Meeting. Any delay tactics will be a clear sign of
further entrenchment, continued disregard for shareholders, and
will increase the damage currently being inflicted on the Company
and its stakeholders.
Sincerely,
Usman S. Nabi
Peter M. Lee
***
No Solicitation
This press release is for informational purposes only and is not
a solicitation of proxies. If Browning West determines to solicit
proxies in respect of any meeting of shareholders of the Company,
any such solicitation will be undertaken by way of an information
circular or as otherwise permitted by applicable Canadian corporate
and securities laws.
Disclaimer for Forward-Looking Information
Certain information in this news release may constitute
“forward-looking information” within the meaning of applicable
securities legislation. Forward-looking statements and information
generally can be identified by the use of forward-looking
terminology such as “outlook,” “objective,” “may,” “will,”
“expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,”
“plans,” “continue,” or similar expressions suggesting future
outcomes or events. Forward-looking information in this news
release may include, but is not limited to, statements of Browning
West regarding (i) how Browning West intends to exercise its legal
rights as a shareholder of the Company, and (ii) its plans to make
changes at the Board and management of the Company.
Although Browning West believes that the expectations reflected
in any such forward-looking information are reasonable, there can
be no assurance that such expectations will prove to be correct.
Such forward-looking statements are subject to risks and
uncertainties that may cause actual results, performance or
developments to differ materially from those contained in the
statements including, without limitation, the risks that (i) the
Company may use tactics to thwart the rights of Browning West as a
shareholder and (ii) the actions being proposed and the changes
being demanded by Browning West, may not take place for any reason
whatsoever. Except as required by law, Browning West does not
intend to update these forward-looking statements.
Advisors
Olshan Frome Wolosky LLP is serving as legal counsel, Goodmans
LLP is serving as Canadian legal counsel, and Longacre Square
Partners is serving as strategic advisor to Browning West. Carson
Proxy is serving as proxy advisor.
About Browning West, LP
Browning West is an independent investment partnership based in
Los Angeles, California. The partnership employs a concentrated,
long-term, and fundamental approach to investing and focuses
primarily on investments in North America and Western Europe.
Browning West seeks to identify and invest in a limited number
of high-quality businesses and to hold these investments for
multiple years. Backed by a select group of leading foundations,
family offices, and university endowments, Browning West’s unique
capital base allows it to focus on long-term value creation at its
portfolio companies.
______________________________ 1 Bloomberg market data as of
January 8, 2024 and represents total return relative to the Russell
2000 index since December 8, 2023. Loss in market value calculated
as difference between Gildan market capitalization assuming same
performance as Russell 2000 since December 8, 2023 vs. Gildan
actual return through January 8, 2024. 2 Adjusted EPS growth
measured from FY2019 to FY2023 based on Gildan Annual Report and
FY2023 Gildan guidance. 3 Revenue and Adjusted EPS growth measured
from FY2015 to FY2023 based on Gildan Annual Report and FY2023
Gildan guidance. 4 Bloomberg market data as of January 8, 2024.
FY2023E consensus USD revenue and EBITDA estimates for United
Rentals. 5 Bloomberg. Represents total return and change in market
capitalization from June 4, 2007 to January 8, 2024. 6 United
Rentals Annual Reports & Quarterly Earnings Press Releases
(2007 – 2019). 7 United Rentals Annual Reports & Quarterly
Earnings Press Releases (2007 – 2019). Represents change in
revenue, EBITDA, and free cash flow per share from 2007 to 2019. 8
United Rentals Annual Reports & Quarterly Earnings Press
Releases (2007 – 2023). Margin expansion represents operating
margins from 2007 to 2023 based on Company EBITDA guidance and
Bloomberg consensus estimates for D&A as of January 8, 2024. 9
Bloomberg. United Rentals total return from May 8, 2019 to January
8, 2024. 10 Bloomberg market data as of January 8, 2024 and
represents total return since June 17, 1998 IPO through December 8,
2023. Adjusted EPS CAGR measured from FY1998 through FY2023 from
Gildan Annual Report and Gildan FY2023 guidance. 11 Adjusted EPS
growth measured from FY2019 to FY2023 based on Gildan Annual Report
and FY2023 Gildan guidance. 12 Gildan 2022 Investor Day and 2022
Annual Report. 13 Bloomberg market data as of January 8, 2024. 14
$31 billion USD enterprise value as of last funding round in
December 2022 sourced from The Wall Street Journal article,
“Fanatics Hits $31 Billion Valuation in Latest Funding Round,” from
December 6, 2022. 15 $4.5 billion USD enterprise value as of
September 2019 per CNBC article, “Fanatics hires Nike exec as CFO;
business is targeting over $2.5 billion in sales this year”, from
September 17, 2019. 16 Bloomberg. Nike total return from December
29, 2000 to September 17, 2019. 17 Bloomberg market data as of
January 8, 2024. 18 Bloomberg. Represents total return from August
29, 1997 to January 8, 2024. 19 Bloomberg. Represents change in
market capitalization from June 30, 2016 to January 8, 2024. 20
Canadian National Annual and Quarterly Reports (FY2016 Q2 to FY2023
Q3 Report). 21 Canadian National Annual and Quarterly Reports
(FY2016 Q2 to FY2023 Q3 Report). 22 Bloomberg market data as of
January 8, 2024. Couche-Tard revenue and EBITDA represent October
2023 last twelve month figures in USD. 23 Couche-Tard FQ2 2024
Investor Presentation. 24 Bloomberg. Represents total return of
Couche-Tard from June 4, 2007 to January 8, 2024. 25 Aéroports de
Montréal annual and quarterly financial press releases from 2013 to
2023. 26 Bloomberg. Represents total return from September 12, 1988
to September 24, 2014. 27 Bloomberg. Represents total return from
September 24, 2014 to January 8, 2024. 28 Vistry Group plc is
projected to be the largest U.K. homebuilder by volume in FY2024
based on Bloomberg consensus estimates as of January 8, 2024. 29
Hanesbrands Inc. was a division of Sara Lee Corporation during Ms.
Stuckey’s tenure prior to its spin-off in 2006. Prior to becoming
President of the Casualwear Division, Ms. Stuckey served as
President of Just My Size Company within Hanesbrands Inc. from 1997
to 2000. 30 Dollarama Annual and Quarterly Reports (FY2021 to
October 2023 LTM). Dollarama total return from March 1, 2021 to
September 12, 2023. 31 RONA website – “News” section. 32 Pomerleau
2021 Annual Report. Assumes an average USD to CAD foreign exchange
rate of 1.2535.
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Browning West info@browningwest.com 310-984-7600
Longacre Square Partners Charlotte Kiaie / Scott Deveau,
646-386-0091 browningwest@longacresquare.com
Carson Proxy Christine Carson, 416-804-0825
christine@carsonproxy.com
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