By Abigail W. Adams
Portland, Me., Jan. 9 – Colfax Corp. priced $400 million of three-year tangible equity units prior to the market open on Wednesday at the midpoint of talk with a dividend of 5.75% and an initial conversion premium of 20%, according to an FWP filing with the Securities and Exchange Commission.
Price talk was for a dividend of 5.5% to 6% and an initial conversion premium of 17.5% to 22.5%, according to market source.
J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC are the active bookrunners for the registered deal.
BNP Paribas Securities Corp., Citizens Capital Markets Inc., Barclays, HSBC Securities (USA) Inc., Goldman Sachs & Co. LLC and Citigroup Global Markets Inc. are the passive bookrunners.
The deal carries a $60 million greenshoe.
The units consist of a prepaid stock purchase contract and a senior amortizing note due January 2022.
The senior amortizing note has a principal amount of $15.6099 and bears interest of 6.5% annually.
The fair market value of the purchase contract is $84.3901, according to the FWP filing.
The units are callable upon the termination of Colfax’s acquisition of DJO Global Inc.
The rate for settlement prior to Jan. 15, 2020, not connected to a fundamental change, will be 90% of the minimum settlement rate, or 3.6 shares of common stock per purchase contract.
The rate of settlement between Jan. 15, 2020 and Jan. 15, 2021 will be 95% of the minimum settlement or 3.8 shares.
There is takeover protection.
The minimum settlement rate is 4 shares and maximum 4.8054 shares per purchase contract.
One or more affiliates of the chairman of the board, Mitchell Rales, and current stockholder Steven Rales have indicated an interest to purchase up to $50 million of the tangible equity units, according to a company news release.
The units will be listed for trade on the New York Stock Exchange under the ticker “CFXA.”
Proceeds from the offering will be used to finance a portion of the acquisition of DJO Global or for general corporate purposes if the acquisition is not consummated.
Colfax is a diversified industrial technology company.
| Issuer: | Colfax Corp.
|
| Securities: | Tangible equity units
|
| Amount: | $400 million
|
| Greenshoe: | $60 million
|
| Maturity: | Jan. 15, 2022
|
| Bookrunners: | J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC (active) BNP Paribas Securities Corp., Citizens Capital Markets Inc., Barclays, HSBC Securities (USA) Inc., Goldman Sachs & Co. LLC and Citigroup Global Markets Inc.
|
| Dividend: | 5.75%
|
| Price: | $100
|
| Premium: | 20%
|
| Price: | $25
|
| Conversion rate: | Minimum 4 shares and maximum 4.8054 shares
|
| Call options: | Upon the termination of Colfax’s acquisition of DJO Global Inc.
|
| Pricing date: | Jan. 9
|
| Settlement date: | Jan. 11
|
| Talk: | Dividend of 5.5% to 6% and an initial conversion premium of 17.5% to 22.5%
|
| Stock symbol: | NYSE: CFX
|
| Stock price: | $20.81 as of market close on Jan. 8
|
| Market capitalization: | $2.44 billion
|
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