By Abigail W. Adams
Portland, Me., Aug. 19 – Middleby Corp. priced an upsized $650 million five-year convertible notes after the market close on Tuesday at par with a coupon of 1% and an initial conversion premium of 33%, according to a company news release.
Pricing came at the midpoint of talk for a coupon of 0.75% to 1.25% and toward the midpoint of talk for an initial conversion premium of 30% to 35%, according to a market source.
BofA Securities Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, BMO Capital Markets Corp. and Guggenheim Partners are joint bookrunners for the Rule 144A deal, which carries an upsized greenshoe of $97.5 million.
The initial size of the deal was $550 million with a greenshoe of $82.5 million.
The notes are contingently convertible until June 1, 2025.
The notes are non-callable until Sept. 5, 2023 and then subject to a 130% hurdle.
Upon conversion, the principal amount of the notes will be settled in cash with the remaining amount to be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing of the notes, the company entered into capped call transactions with a cap price of $207.93, which represents a premium of 115% over the closing price of stock on Aug. 18.
Net proceeds are expected to be $633.9 million or $729.2 million if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the call spread, to prepay a portion of its term loan obligations and for general corporate purposes, which may include repayment of debt and potential acquisitions and strategic transactions.
Middleby is an Elgin, Ill.-based foodservice equipment manufacturer.
| Issuer: | Middleby Corp.
|
| Securities: | Convertible senior notes
|
| Amount: | $650 million
|
| Greenshoe: | $97.5 million
|
| Maturity: | Sept. 1, 2025
|
| Bookrunners: | BofA Securities Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC, BMO Capital Markets Corp. and Guggenheim Partners
|
| Coupon: | 1%
|
| Price: | Par
|
| Yield: | 1%
|
| Conversion premium: | 33%
|
| Conversion price: | $128.62
|
| Conversion rate: | 7.7746
|
| Call options: | Non-callable until Sept. 5, 2023 and then subject to a 130% hurdle
|
| Put options: | None
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| Pricing date: | Aug. 18
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| Settlement date: | Aug. 21
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.75% to 1.25% and initial conversion premium of 30% to 35%
|
| Stock symbol: | Nasdaq: MIDD
|
| Stock price: | $96.71
|
| Market capitalization: | $5.38 billion
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