By Abigail W. Adams
Portland, Me., Sept. 22 – RBC Bearings Inc. priced $400 million par-of-$100 three-year mandatory convertible preferred stock after the market close on Tuesday at par with a dividend of 5% and a threshold appreciation premium of 22.5%, according to an FWP filing with the Securities and Exchange Commission.
Pricing came at the rich end of talk for a dividend of 5% to 5.5% and at the midpoint of talk for a threshold appreciation premium of 20% to 25%, according to a market source.
Goldman Sachs & Co. LLC, Wells Fargo Securities LLC, BofA Securities Inc., Citigroup Global Markets Inc. and Truist Securities Inc. were bookrunners for the registered offering, which carries a greenshoe of $60 million.
The convertible preferreds are non-callable unless the acquisition of ABB’s Dodge Mechanical Power Transmission Business is not consummated by Jan. 26, 2022.
If the acquisition is not completed, the convertible preferreds become freely callable.
There is takeover protection.
The preferred stock will be listed on the Nasdaq under the ticker ‘ROLLP’.
Concurrently, the company priced a secondary offering of 3 million shares of common stock at a public offering price of $185. The secondary offering carries a greenshoe of 450,000 shares.
In addition, Roller Bearing Co. of America Inc., a subsidiary, may also price a $500 million offering of senior notes.
Net proceeds from the mandatory convertible preferreds are expected to be $387.2 million or will be $445.4 million if the greenshoe is exercised in full.
Net proceeds from the secondary offering are expected to be $526.4 million or will be $605.5 million if the greenshoe is exercised in full.
Proceeds, together with proceeds from the concurrent offerings, will be used to fund the cash purchase price of the pending acquisition.
RBC Bearings is an Oxford, Conn.-based ball and roller bearing manufacturing company serving the industrial, aerospace and defense industries.
| Issuer: | RBC Bearings Inc.
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| Securities: | Mandatory convertible preferred stock
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| Amount: | $400 million
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| Greenshoe: | $60 million
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| Maturity: | Oct. 15, 2024
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| Bookrunners: | Goldman Sachs & Co. LLC, Wells Fargo Securities LLC, BofA Securities Inc., Citigroup Global Markets Inc. and Truist Securities Inc.
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| Co-managers: | Citizens Capital Markets, Inc., Fifth Third Securities, Inc., KeyBanc Capital Markets Inc., Regions Securities LLC, Morgan Stanley & Co. LLC, Academy Securities, Inc. and William Blair & Co., LLC
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| Dividend: | 5%
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| Price: | Par of $100
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| Yield: | 5%
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| Appreciation premium: | 22.5%
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| Conversion price: | $226.63
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| Conversion rate: | Minimum of 0.4413, maximum of 0.5405
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| Call options: | Non-callable unless acquisition is not completed by Jan. 26, 2022
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| Pricing date: | Sept. 21
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| Settlement date: | Sept. 24
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| Distribution: | Registered
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| Talk: | Dividend of 5% to 5.5% and threshold appreciation premium of 20% to 25%
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| Listing: | Nasdaq: ROLLP
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| Stock symbol: | Nasdaq: ROLL
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| Stock price: | $185 in concurrent offering
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| Market capitalization: | $4.81 billion
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