II-VI Incorporated announced the pricing of public offerings of $400 million worth common shares and $400 million worth 6.00% Series A mandatory convertible preferred stock. Notably, the common stock offerings represent an increase from the $350-million offering announced on Jun 30, while that for preferred stocks has been left unchanged.
It is worth mentioning here that the company’s shares gained 1.4% yesterday, ending the trading session at $44.10.
Inside the Headlines
As noted, its common share offering is now for 9.3 million shares versus the previously announced 7.2 million shares. Each share has been priced at $43.00 for the public. Also, the underwriters have been given the option — valid for 30 days — to buy an additional $60 million (or 1.4 million) worth common shares. A discount for underwriters has been fixed at $1.935 per share.
The preferred stock offerings comprise of 2 million stocks, each mandatorily convertible into the company’s common shares on Jul 1, 2023. Also, the underwriters have a 30-day period to purchase additional 300,000 preferred shares worth $60 million. Both the public offering and liquidation prices are fixed at $200.00 per share. The discount for underwriters is at $6.00 per share.
The dividend on preferred stock is equal to 6% of the liquidation price to be paid quarterly on Jan 1, Apr 1, Jul 1 and Oct 1. The first dividend payout will be $2.80 for each share and will be paid out on Oct 1, 2020. Payouts after the first installment will be $3.00.
The settlement date for the offerings is Jul 7, 2020.
II-VI anticipates receiving net proceeds (after deducting for discounts and issuance costs) of $381.3 million from its common stock offerings and $387 million from offerings of preferred stocks. However, if the underwriter options are exercised in full, then the proceeds from the common stock offerings are expected to be $438.6 million and that from the preferred stock to $445.2 million.
The company anticipates using $714.6 million from the above-mentioned offerings and cash on hand for the repayment of borrowings, make investments in growth opportunities and satisfying corporate needs.
It is worth mentioning here that II-VI’s shares outstanding at the end of third-quarter fiscal 2020 (ended March 2020) were 104.3 million. We believe that the above-mentioned common stock offering along with preferred stocks, when converted into common stock, will increase the company’s common stock outstanding balance.
Rise in shares outstanding will likely have adverse impacts on its earnings per share.
Zacks Rank, Price Performance and Estimate Trend
With a market capitalization of $4 billion, II-VI currently sports a Zacks Rank #1 (Strong Buy). The company’s share price has increased 65.4% in the past three months compared with the industry’s growth of 26.4%.
In the past 60 days, the Zacks Consensus Estimate for its earnings has increased 55% to 62 cents per share for the fourth quarter of fiscal 2020 (ended June 2020, results are awaited), while that for fiscal 2020 (ended June 2020, results are awaited) grew 40.7% to $1.97. Also, earnings estimates for fiscal 2021 (ending June 2021) have increased 8.9% to $2.94 in the same period.
IIVI Incorporated Price and Consensus
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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II-VI Incorporated announced the pricing of public offerings of $400 million worth common shares and $400 million worth 6.00% Series A mandatory convertible preferred stock. Notably, the common stock offerings represent an increase from the $350-million offering announced on Jun 30, while that for preferred stocks has been left unchanged.
It is worth mentioning here that the company’s shares gained 1.4% yesterday, ending the trading session at $44.10.
Inside the Headlines
As noted, its common share offering is now for 9.3 million shares versus the previously announced 7.2 million shares. Each share has been priced at $43.00 for the public. Also, the underwriters have been given the option — valid for 30 days — to buy an additional $60 million (or 1.4 million) worth common shares. A discount for underwriters has been fixed at $1.935 per share.
The preferred stock offerings comprise of 2 million stocks, each mandatorily convertible into the company’s common shares on Jul 1, 2023. Also, the underwriters have a 30-day period to purchase additional 300,000 preferred shares worth $60 million. Both the public offering and liquidation prices are fixed at $200.00 per share. The discount for underwriters is at $6.00 per share.
The dividend on preferred stock is equal to 6% of the liquidation price to be paid quarterly on Jan 1, Apr 1, Jul 1 and Oct 1. The first dividend payout will be $2.80 for each share and will be paid out on Oct 1, 2020. Payouts after the first installment will be $3.00.
The settlement date for the offerings is Jul 7, 2020.
II-VI anticipates receiving net proceeds (after deducting for discounts and issuance costs) of $381.3 million from its common stock offerings and $387 million from offerings of preferred stocks. However, if the underwriter options are exercised in full, then the proceeds from the common stock offerings are expected to be $438.6 million and that from the preferred stock to $445.2 million.
The company anticipates using $714.6 million from the above-mentioned offerings and cash on hand for the repayment of borrowings, make investments in growth opportunities and satisfying corporate needs.
It is worth mentioning here that II-VI’s shares outstanding at the end of third-quarter fiscal 2020 (ended March 2020) were 104.3 million. We believe that the above-mentioned common stock offering along with preferred stocks, when converted into common stock, will increase the company’s common stock outstanding balance.
Rise in shares outstanding will likely have adverse impacts on its earnings per share.
Zacks Rank, Price Performance and Estimate Trend
With a market capitalization of $4 billion, II-VI currently sports a Zacks Rank #1 (Strong Buy). The company’s share price has increased 65.4% in the past three months compared with the industry’s growth of 26.4%.
In the past 60 days, the Zacks Consensus Estimate for its earnings has increased 55% to 62 cents per share for the fourth quarter of fiscal 2020 (ended June 2020, results are awaited), while that for fiscal 2020 (ended June 2020, results are awaited) grew 40.7% to $1.97. Also, earnings estimates for fiscal 2021 (ending June 2021) have increased 8.9% to $2.94 in the same period.
IIVI Incorporated Price and Consensus
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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