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Griffon (GFF) to Offer 8M Common Shares, To Pay Down Debts
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Griffon Corporation (GFF - Free Report) yesterday announced its intention to offer 8 million common stocks to the public. Also, the offering has been underwritten by the company itself and a shareholder that wishes to sell some of Griffon shares.
It is worth mentioning here that Griffon’s shares declined 1.03% yesterday, with the trading closing at $24.07.
Inside the Headlines
As noted, the company has provided underwriters an option to buy additional 0.7 million of its common share in the next 30 days. Similarly, an offer to purchase extra 0.5 million has been extended to the underwriters by the selling shareholders. Price per share for underwriters will be the net of public offer price, and underwriting commissions and discounts.
Assuming no purchases are made by the underwriters, the company’s outstanding common shares post the 8-million offering will likely be 55.4 million. Notably, its diluted shares outstanding were 43.8 million at the end of third-quarter fiscal 2020 (ended June 2020).
The company intends to use the net proceeds raised from the offering to reduce its borrowings under revolving credit facility, generate corporate purposes, satisfy working capital needs, and for the payment of expenses and fees. However, the selling shareholders will receive their share of proceeds.
Fund-raising Actions in 2020
In June, Griffon raised $145.4 million from the offering of $150 million worth of 5.75% senior notes due to mature on Mar 1, 2028. Along with its available cash, the company intends to use the proceeds to reduce its debts via the redemption of $150 million worth of 5.25% senior notes due to expire in 2022. Also, it intends on using the funds for the payment of expenses and fees as well as accrued interest related to the 2022 notes.
Also, Griffon closed the offering of $850 million worth of 5.75% senior notes due 2028. Part of the proceeds from the offering was used for repurchasing notes due 2022.
Zacks Rank, Estimate Trend and Price Performance
Griffon currently has a market capitalization of $1.2 billion and sports a Zacks Rank #1 (Strong Buy) at present.
The company’s shares have gained 69.6% in the past three months as compared with the industry’s growth of 23.8%.
In the past 30 days, the Zacks Consensus Estimate for its earnings has been increased by 76.7% to $1.52 per share for fiscal 2020 (ending September 2020) and by 104.8% to $1.72 per share for fiscal 2021 (ending September 2021).
Some other companies in the industry, which raised funds primarily through debt offerings year to date, include Danaher Corporation (DHR - Free Report) , General Electric Company (GE - Free Report) and Carlisle Companies Incorporated (CSL - Free Report) . While Danaher currently carries a Zacks Rank #2 (Buy), General Electric presently has a Zacks Rank #4 (Sell) and Carlisle Companies carries a Zacks Rank #3 (Hold).
In the past 30 days, earnings estimates for Danaher have improved for the current year, while declined for General Electric and Carlisle Companies. Further, positive earnings surprise, on average, for the last four quarters was 10.83% for Danaher, 4.47% for General Electric and 24.49% for Carlisle Companies.
Zacks Top 10 Stocks for 2020
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Griffon (GFF) to Offer 8M Common Shares, To Pay Down Debts
Griffon Corporation (GFF - Free Report) yesterday announced its intention to offer 8 million common stocks to the public. Also, the offering has been underwritten by the company itself and a shareholder that wishes to sell some of Griffon shares.
It is worth mentioning here that Griffon’s shares declined 1.03% yesterday, with the trading closing at $24.07.
Inside the Headlines
As noted, the company has provided underwriters an option to buy additional 0.7 million of its common share in the next 30 days. Similarly, an offer to purchase extra 0.5 million has been extended to the underwriters by the selling shareholders. Price per share for underwriters will be the net of public offer price, and underwriting commissions and discounts.
Assuming no purchases are made by the underwriters, the company’s outstanding common shares post the 8-million offering will likely be 55.4 million. Notably, its diluted shares outstanding were 43.8 million at the end of third-quarter fiscal 2020 (ended June 2020).
The company intends to use the net proceeds raised from the offering to reduce its borrowings under revolving credit facility, generate corporate purposes, satisfy working capital needs, and for the payment of expenses and fees. However, the selling shareholders will receive their share of proceeds.
Fund-raising Actions in 2020
In June, Griffon raised $145.4 million from the offering of $150 million worth of 5.75% senior notes due to mature on Mar 1, 2028. Along with its available cash, the company intends to use the proceeds to reduce its debts via the redemption of $150 million worth of 5.25% senior notes due to expire in 2022. Also, it intends on using the funds for the payment of expenses and fees as well as accrued interest related to the 2022 notes.
Also, Griffon closed the offering of $850 million worth of 5.75% senior notes due 2028. Part of the proceeds from the offering was used for repurchasing notes due 2022.
Zacks Rank, Estimate Trend and Price Performance
Griffon currently has a market capitalization of $1.2 billion and sports a Zacks Rank #1 (Strong Buy) at present.
The company’s shares have gained 69.6% in the past three months as compared with the industry’s growth of 23.8%.
In the past 30 days, the Zacks Consensus Estimate for its earnings has been increased by 76.7% to $1.52 per share for fiscal 2020 (ending September 2020) and by 104.8% to $1.72 per share for fiscal 2021 (ending September 2021).
Griffon Corporation Price and Consensus
Griffon Corporation price-consensus-chart | Griffon Corporation Quote
Some other companies in the industry, which raised funds primarily through debt offerings year to date, include Danaher Corporation (DHR - Free Report) , General Electric Company (GE - Free Report) and Carlisle Companies Incorporated (CSL - Free Report) . While Danaher currently carries a Zacks Rank #2 (Buy), General Electric presently has a Zacks Rank #4 (Sell) and Carlisle Companies carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, earnings estimates for Danaher have improved for the current year, while declined for General Electric and Carlisle Companies. Further, positive earnings surprise, on average, for the last four quarters was 10.83% for Danaher, 4.47% for General Electric and 24.49% for Carlisle Companies.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>