Related party transactions

A. Entities affiliated with Blackstone

In January 2018, Gates and Blackstone Management Partners L.L.C. (“BMP”) and Blackstone Tactical Opportunities Advisors L.L.C., each affiliates of our Sponsor (the “Managers”), entered into a new Transaction and Monitoring Fee Agreement (the “New Monitoring Fee Agreement”). Under this agreement, Gates Industrial Corporation plc and certain of its direct and indirect subsidiaries (collectively the “Monitoring Service Recipients”) engaged the Managers to provide certain monitoring, advisory and consulting services in the following areas:


•	advice regarding financings and relationships with lenders and bankers;


•	advice regarding the selection, retention and supervision of independent auditors, outside legal counsel, investment bankers and other advisors or consultants;


•	advice regarding environmental, social and governance issues pertinent to our affairs;


•	advice regarding the strategic direction of our business; and


•	such other advice directly related to or ancillary to the above advisory services as we may reasonably request.

In consideration of these oversight services, Gates agreed to pay BMP an annual fee of 1% of a covenant EBITDA measure defined under the agreements governing our senior secured credit facilities. In addition, the Monitoring Service Recipients agreed to reimburse the Managers for any related out-of-pocket expenses incurred by the Managers and their affiliates. During the year ended December 28, 2019, Gates incurred $6.5 million, compared with $8.0 million during Fiscal 2018 and $6.7 million during Fiscal 2017, in respect of these oversight services and out-of-pocket expenses, of which there was no amount owing at December 28, 2019 or December 29, 2018.

The New Monitoring Fee Agreement terminates upon the earlier to occur of (i) the second anniversary of the closing date of the initial public offering of Gates or (ii) the date our Sponsor beneficially owns less than 5% of our ordinary shares and such shares have a fair market value of less than $25.0 million. Following termination of the New Monitoring Fee Agreement, the Managers will refund us any portion of the monitoring fee previously paid in respect of fiscal quarters that follow the termination date.

In addition, in connection with the initial public offering, we entered into a new Support and Services Agreement with BMP, under which Gates Industrial Corporation plc and certain of its direct and indirect subsidiaries reimburse BMP for customary support services provided by Blackstone’s portfolio operations group to the Company at BMP’s direction. BMP will invoice the Company for such services based on the time spent by the relevant personnel providing such services during the applicable period and Blackstone’s allocated costs of such personnel. During Fiscal 2019, $0.1 million was paid under this agreement, compared with $0 during Fiscal 2018 and Fiscal 2017. This agreement terminates on the date our Sponsor beneficially owns less than 5% of our ordinary shares and such shares have a fair market value of less than $25.0 million, or such earlier date as may be chosen by Blackstone.

In connection with our initial public offering in January 2018, Blackstone Advisory Partners L.P., an affiliate of Blackstone, received underwriting fees of $3.2 million. In addition, Blackstone Advisory Partners L.P. served as an initial purchaser of $99.4 million of the 6.25% Dollar Senior Notes issued in November 2019 and received compensation of $1.2 million in connection therewith.

B. Commercial transactions with sponsor portfolio companies

Our Sponsor and its affiliates have ownership interests in a broad range of companies. We have entered and may in the future enter into commercial transactions in the ordinary course of our business with some of these companies, including the sale of goods and services and the purchase of goods and services.

During the periods presented, our Sponsor held an interest in Custom Truck One Source (“Custom Truck”), a single-source provider of specialized truck and heavy equipment solutions in North America. Net sales by Gates to Custom Truck were $0.2 million during Fiscal 2019, compared with $0 during Fiscal 2018 and Fiscal 2017.

In addition, during the period through to November 2, 2017, Blackstone held a controlling interest in Alliance Automotive Group (“Alliance”), a wholesale distributor of automotive parts in France and the U.K. Net sales by Gates to affiliates of Alliance during the portion of Fiscal 2017 in which Blackstone controlled Alliance were $27.2 million.

C. Equity method investees

Sales to and purchases from equity method investees were as follows:



	For the year ended
(dollars in millions)	December 28, 2019			December 29, 2018			December 30, 2017
Sales	$	1.4		$	1.6		$	1.8
Purchases	$	(15.4	)	$	(15.2	)	$	(9.8	)

Amounts outstanding in respect of these transactions were payables of $0.2 million as of December 28, 2019, compared with $0.1 million as of December 29, 2018. During the year ended December 28, 2019, we received dividends of $0 from our equity method investees, compared with $0.4 million during Fiscal 2018 and $0.3 million during Fiscal 2017.

D. Non-Gates entities controlled by non-controlling shareholders

Sales to and purchases from non-Gates entities controlled by non-controlling shareholders were as follows:



	For the year ended
(dollars in millions)	December 28, 2019			December 29, 2018			December 30, 2017
Sales	$	51.3		$	60.6		$	55.2
Purchases	$	(20.5	)	$	(20.7	)	$	(21.7	)

Amounts outstanding in respect of these transactions were as follows:



(dollars in millions)	As of December 28, 2019			As of December 29, 2018
Receivables	$	4.2		$	0.6
Payables	$	(5.9	)	$	(0.3	)

E. Majority-owned subsidiaries

We finalized an agreement with the non-controlling interest holder in certain of our consolidated, majority-owned subsidiaries, regarding the scope of business of such subsidiaries, which will result in a smaller share of net income allocated to non-controlling interests. This change is retrospectively effective from the beginning of 2019 and includes a one-time adjustment of $15.0 million, which has been recorded in the first quarter of 2019 in the non-controlling interests line in the consolidated statement of operations.