We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Middleby (MIDD) Prices $650M Worth of Senior Notes Offering
Read MoreHide Full Article
The Middleby Corporation (MIDD - Free Report) announced, on Aug 18, an increase of $100 million in its previous offering of $550 million worth of convertible senior notes. Subject to the fulfillment of customary conditions, the private offering of notes is expected to close on Aug 21, 2020.
The previous notes offering was announced by the company on Aug 17 along with other measures directed to reshape its capital structure.
It is worth mentioning here that its shares have lost 8.7% in the past two days, ending yesterday’s trading session at $94.21.
Inside the Headline
The $650-million senior notes offering is for qualified institutional buyers — as defined under the Securities Act of 1933. Also, the initial buyers have been given the facility to purchase extra $97.5 million (upside from the previously offered $82.5 million) notes in 13 days.
The above-mentioned notes — to be considered the company’s senior unsecured obligations — carry a coupon rate of 1% and will mature on Sep 1, 2025. Interest payments on them will be done twice annually, on Mar 1 and Sep 1. The first interest payment will be made on Mar 1, 2021.
Conversion conditions are separate, if the conversion option is exercised before Jun 1, 2025, and on or after Jun 1, 2025. Cash equivalent of the principal amount of the notes to be converted will be paid by Middleby. Also, the company may use cash or common shares or both cash and shares for the payment of any amount exceeding the principal amount of the notes to be converted. For each $1,000 principal amount of senior notes, the company will exchange 7.7746 of its common shares.
Middleby anticipates receiving $633.9 million as net proceeds from the $650-million notes offering. However, the amount might scale up to $729.2 million, if the offer extended to initial purchasers is exercised in full. Notably, the proceeds will be after deducting offering expenses and discounts to initial purchasers.
The company intends to use the net proceeds from the offering for the prepayment of term loan and satisfying general corporate needs. Also, it might fund expenses related to capped call transactions with the note offering proceeds.
Notably, the capped call transactions, when implemented, will help Middleby nullify the dilutive impact of notes conversion into shares.
Insight into Middleby’s Actions to Reshape Capital Structure
Middleby opted to amend its senior credit facility and hence, entered an agreement with other related parties. A brief of the amendments is provided below.
With the amendment, the company’s senior credit facility (secured) will be worth $3.1 billion — comprising a term loan of $350 million and revolving credit facility (multiple currencies) of $2.75 billion. The secured credit facility’s date of maturity will be Jan 31, 2025.
The threshold leverage ratio will likely be 5.50:1.00. Borrowing costs will likely be the same at pre-amendment level. The agreement also provides for secured net debt leverage ratio of 3.50:1.00. This ratio can reach up to 4.50:1.00 by the end of first-quarter 2021 and to 4.25:1.00 at the end of second-quarter 2021.
Notably, the agreement is conditioned upon the prepayment of $400 million worth of term loan by Middleby.
The company believes that enhanced financial flexibility from the transactions will ensure continuity in growth investments.
Zacks Rank, Price Performance & Estimate Trend
With a market capitalization of $5.4 billion, Middleby currently carries a Zacks Rank #3 (Hold). Solid product offerings, cost-saving actions, healthy liquidity and supply-chain initiatives might be beneficial for the company in the quarters ahead. However, demand weakness caused by the pandemic, increase in costs and expenses, and huge debts are concerning.
In the past three months, the company’s share price has increased 47.9% compared with the industry’s growth of 21.1%.
In the past 30 days, the Zacks Consensus Estimate for Middleby’s earnings has been raised by 9.2% to $4.14 for 2020 and 1.9% to $5.24 for 2021. Also, the consensus estimate for the third quarter rose 12.7% to 89 cents per share during the same timeframe.
Some better-ranked stocks in the industry are Chart Industries, Inc. (GTLS - Free Report) , Altra Industrial Motion Corp. and Graco Inc. (GGG - Free Report) . While Chart Industries currently sports a Zacks Rank #1 (Strong Buy), both Altra Industrial and Graco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for these companies have improved for the current year. Further, earnings surprise for the last reported quarter was 46.51% for Chart Industries, 76.47% for Altra Industrial and 37.04% for Graco.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Middleby (MIDD) Prices $650M Worth of Senior Notes Offering
The Middleby Corporation (MIDD - Free Report) announced, on Aug 18, an increase of $100 million in its previous offering of $550 million worth of convertible senior notes. Subject to the fulfillment of customary conditions, the private offering of notes is expected to close on Aug 21, 2020.
The previous notes offering was announced by the company on Aug 17 along with other measures directed to reshape its capital structure.
It is worth mentioning here that its shares have lost 8.7% in the past two days, ending yesterday’s trading session at $94.21.
Inside the Headline
The $650-million senior notes offering is for qualified institutional buyers — as defined under the Securities Act of 1933. Also, the initial buyers have been given the facility to purchase extra $97.5 million (upside from the previously offered $82.5 million) notes in 13 days.
The above-mentioned notes — to be considered the company’s senior unsecured obligations — carry a coupon rate of 1% and will mature on Sep 1, 2025. Interest payments on them will be done twice annually, on Mar 1 and Sep 1. The first interest payment will be made on Mar 1, 2021.
Conversion conditions are separate, if the conversion option is exercised before Jun 1, 2025, and on or after Jun 1, 2025. Cash equivalent of the principal amount of the notes to be converted will be paid by Middleby. Also, the company may use cash or common shares or both cash and shares for the payment of any amount exceeding the principal amount of the notes to be converted. For each $1,000 principal amount of senior notes, the company will exchange 7.7746 of its common shares.
Middleby anticipates receiving $633.9 million as net proceeds from the $650-million notes offering. However, the amount might scale up to $729.2 million, if the offer extended to initial purchasers is exercised in full. Notably, the proceeds will be after deducting offering expenses and discounts to initial purchasers.
The company intends to use the net proceeds from the offering for the prepayment of term loan and satisfying general corporate needs. Also, it might fund expenses related to capped call transactions with the note offering proceeds.
Notably, the capped call transactions, when implemented, will help Middleby nullify the dilutive impact of notes conversion into shares.
Insight into Middleby’s Actions to Reshape Capital Structure
Middleby opted to amend its senior credit facility and hence, entered an agreement with other related parties. A brief of the amendments is provided below.
With the amendment, the company’s senior credit facility (secured) will be worth $3.1 billion — comprising a term loan of $350 million and revolving credit facility (multiple currencies) of $2.75 billion. The secured credit facility’s date of maturity will be Jan 31, 2025.
The threshold leverage ratio will likely be 5.50:1.00. Borrowing costs will likely be the same at pre-amendment level. The agreement also provides for secured net debt leverage ratio of 3.50:1.00. This ratio can reach up to 4.50:1.00 by the end of first-quarter 2021 and to 4.25:1.00 at the end of second-quarter 2021.
Notably, the agreement is conditioned upon the prepayment of $400 million worth of term loan by Middleby.
The company believes that enhanced financial flexibility from the transactions will ensure continuity in growth investments.
Zacks Rank, Price Performance & Estimate Trend
With a market capitalization of $5.4 billion, Middleby currently carries a Zacks Rank #3 (Hold). Solid product offerings, cost-saving actions, healthy liquidity and supply-chain initiatives might be beneficial for the company in the quarters ahead. However, demand weakness caused by the pandemic, increase in costs and expenses, and huge debts are concerning.
In the past three months, the company’s share price has increased 47.9% compared with the industry’s growth of 21.1%.
In the past 30 days, the Zacks Consensus Estimate for Middleby’s earnings has been raised by 9.2% to $4.14 for 2020 and 1.9% to $5.24 for 2021. Also, the consensus estimate for the third quarter rose 12.7% to 89 cents per share during the same timeframe.
The Middleby Corporation Price and Consensus
The Middleby Corporation price-consensus-chart | The Middleby Corporation Quote
Key Picks
Some better-ranked stocks in the industry are Chart Industries, Inc. (GTLS - Free Report) , Altra Industrial Motion Corp. and Graco Inc. (GGG - Free Report) . While Chart Industries currently sports a Zacks Rank #1 (Strong Buy), both Altra Industrial and Graco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for these companies have improved for the current year. Further, earnings surprise for the last reported quarter was 46.51% for Chart Industries, 76.47% for Altra Industrial and 37.04% for Graco.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>