$75m boost for OneSpaWorld from Steiner Leisure and other investors

Resources to maintain limited operations for 24 months

With this investment, announced April 30, the company expects to have the resources available to maintain limited operations for more than 24 months with monthly cash burn of approximately $2.5m prior to $1.1m in monthly debt service and to remain in compliance with loan agreements for the foreseeable future.

The issue of approximately 18.8m new common shares, for a total consideration of $75m, reflects a 5% premium to the 20-day volume weighted average price of OneSpaWorld shares through the market close on April 29.

As well, 5m warrants were granted to purchase OSW shares at an exercise price of $5.75 per share, with unexercised warrants to expire on the fifth anniversary of closing and are redeemable at the company’s option when its shares trade to $14.50 per share.

OSW shares closed up at $5.79 Thursday.

In 2015, an L Catterton-led investor group acquired the OneSpaWorld business when it closed on the take-private of Steiner Leisure. Private equity group L Catterton's experience in the consumer sector was instrumental in developing the platform for OneSpaWorld to emerge as a public company in March 2019.

Three director spots

Steiner Leisure will expand its role on the board to three of the 10 directors.

'We are pleased to execute this agreement with and invest alongside our long-standing partner, L Catterton,' said Leonard Fluxman, executive chairman of OneSpaWorld. This investment 'substantially increases our financial strength and liquidity, and attests to investor confidence in our ability to weather this unprecedented crisis, rapidly rescale our operations and resume our historical record of profitable growth,' he continued.

CEO Glenn Fusfield described how OneSpaWorld has acted to conserve liquidity by eliminating non-essential expenses, deferring a previously announced dividend payment and suspending dividends. 'And, we have remained closely aligned with our cruise line partners by maintaining operational agility to rapidly scale and provide our outstanding service to our partners and their passengers when voyages resume,' he added.

Fusfield said the Steiner Leisure investment will sustain operations through an extended period of canceled voyages, fuel continued innovation of service offerings and spa experiences and enable the company to capitalize on its 'commanding market share position and growth opportunities when normal operations resume.'

L Catterton's confident in cruising's resilience

'We are proud to have the opportunity to increase our investment and further our partnership with OneSpaWorld,' said Marc Magliacano, L Catterton managing partner and OSW director. 'The cruise industry has shown unabated resilience for over 40 years, and for each disruption experienced, the industry has responded by returning to even higher passenger levels within 24 months. We have worked with OSW’s outstanding team since 2015 and now have re-committed our resources to assist OSW during these challenging times.'

Magliacano added: 'We have tremendous confidence in the OneSpaWorld team and expect that their efforts to position the company to capitalize on opportunities presented by this disruption will further grow their market share and deliver an even safer and more exceptional experience to cruise passengers and destination resort guests when cruising and broader vacationing resumes.'