Nashville, Oct. 26 - Armor Holdings Inc. sold $300 million of 20-year cash-to-zero convertible notes at par to yield 2.0% with a 37.5% initial conversion premium via sole bookrunner Goldman Sachs & Co.
The overnight deal, priced off a shelf registration, will pay a cash coupon for seven years and then accrete for a 2.0% yield to maturity.
The Jacksonville, Fla.-based maker of security products and vehicle armor systems for law enforcement, military, homeland defense and commercial markets is expected to use proceeds to finance the previously announced $92 million purchase of The Specialty Group Inc. and future acquisitions.
Under current accounting standards, Armor Holdings said it will calculate dilution related to the issue in earnings reports with the Treasury stock method, which allows that the effect of the conversion of the notes would only be included in the weighted average shares outstanding balance only upon exceeding the stated conversion price.
Terms of the new deal are:
| Issuer: | Armor Holdings Inc.
|
| Issue: | Convertible cash-to-zero senior subordinated notes
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| Bookrunner: | Goldman Sachs & Co.
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| Amount: | $300 million
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| Greenshoe: | $45 million
|
| Maturity: | Nov. 1, 2024
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| Coupon: | 2.0% through Nov. 1, 2011, then accreting
|
| Price: | Par
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| Yield to maturity: | 2.0%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $54.01
|
| Conversion ratio: | 18.5151
|
| Contingent conversion: | No
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| Contingent payment: | 120%
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| Call: | Non-callable for 7 years
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| Put: | In years 7, 10 and 15.
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| Dividend protection: | Yes
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| Takeover protection: | Yes
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| Price talk: | None
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| Ratings: | Moody's: B1
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| S&P: B+
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| Pricing date: | Oct. 26, before the open
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| Settlement date: | Oct. 29
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| Distribution: | Registered
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