Heico readies two-tranche note offering to fund acquisition

By Mary-Katherine Stinson

Lexington, Ky., July 19 – Heico Corp. plans to issue notes (Baa2//BBB) in two tranches to help fund a previously announced acquisition of Wencor Group from Warburg Pincus, according to a 424B5 filing with the Securities and Exchange Commission.

The notes will feature a make-whole call, followed by a par call.

A change-of-control triggering event will make the notes putable at 101.

The notes will not be listed on any securities exchange.

Truist Securities, Inc., BofA Securities, Inc. and Wells Fargo Securities, LLC are the bookrunners.

Truist Bank is the trustee.

Akerman LLP will work as legal counsel for the issuer. Heico will also be advised by Devine, Millimet & Branch, Professional Association (New Hampshire law), Ballard Spahr LLP (Arizona and Minnesota law), Hartzog Conger Cason LLP (Iowa law) and Stoel Rives LLP (Oregon law). King & Spalding LLP is acting as legal counsel to the underwriters.

The completion of this offering is not contingent on the closing of the Wencor acquisition. However, if closing has not occurred by the earlier of Feb. 14, 2024 and the date the merger agreement is terminated, the notes will be putable at 101, the special mandatory redemption price.

Heico intends to use the net proceeds from the notes sale to fund a portion of the purchase price for its acquisition of the Wencor Group, including related fees and expenses, with any remaining amounts, for general corporate purposes.

Heico has agreed to acquire Wencor for a total purchase price of $1.9 billion in cash, subject to certain working capital, debt and other customary adjustments, and 1,137,656 shares of Heico class A common stock, or $2.05 billion total. The acquisition is expected to close in the second half of 2023.

Hollywood, Fla.-based Heico is engaged in the design, production, servicing and distribution of products and services to niche segments of the aviation, defense, space, medical, telecommunications and electronics industries.

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