By Rebecca Melvin
New York, Sept. 10 – Stericycle Inc. priced $700 million of mandatory convertible preferred stock after the market close on Wednesday with a 5.25% dividend and a 25% initial conversion premium, according to a term sheet.
Pricing of the registered, off-the-shelf deal came at the midpoint of 5% to 5.5% dividend talk and at the rich end of 20% to 25% premium talk.
Unless earlier converted or redeemed, each mandatory will automatically convert into a variable number of common shares on Sept. 15, 2018.
BofA Merrill Lynch, Goldman Sachs & Co. and J.P. Morgan Securities LLC were the joint bookrunning managers of the deal, which has an over-allotment option of $70 million.
Net proceeds are earmarked to finance the company’s previously announced acquisition of Shred-it International ULC, Shred-it JV LP, Boost GP Corp. and Boost Holdings LP, including the payment of related fees and expenses.
The mandatory deal is not contingent on completion of the acquisition. If the acquisition is not completed by Jan. 15, 2016, the company has the option to redeem the mandatories.
Lake Forest, Ill.-based Stericycle is a provider of medical waste collection, transportation, treatment and disposal services and safety and compliance programs.
| Issuer: | Stericycle Inc.
|
| Securities: | Mandatory convertible preferred stock
|
| Amount: | $700 million
|
| Greenshoe: | $70 million
|
| Maturity: | Sept. 15, 2018
|
| Bookrunners: | BofA Merrill Lynch, Goldman Sachs & Co., J.P. Morgan Securities LLC
|
| Co-managers: | HSBC Securities (USA) Inc., MUFG, Santander Investment Securities Inc., SMBC Nikko Securities America Inc., U.S. Bancorp Investments Inc.
|
| Dividend: | 5.25%
|
| Price: | Par
|
| Yield: | 5.25%
|
| Conversion premium: | 25%
|
| Threshold appreciation price: | $170.31
|
| Maximum rate: | 7.3394 shares
|
| Minimum rate: | 5.8716 shares
|
| Takeover protection: | Yes
|
| Pricing date: | Sept. 9
|
| Settlement date: | Sept. 15
|
| Distribution: | Registered, off the shelf
|
| Price talk: | 5%-5.5%, up 20%-25%
|
| Stock symbol: | Nasdaq: SRCL
|
| Stock reference price: | $136.25 as of close Sept. 9
|
| Market capitalization: | $11.6 billion
|
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