Fortive talks $1 billion three-year mandatory convertibles to yield 5% to 5.5%, up 17.5% to 22.5%

By Abigail W. Adams

Portland, Me., June 26 – Fortive Corp. plans to price $1 billion, or 1 million shares, of three-year series A mandatory convertible preferred stock after the market close on Tuesday with price talk for a dividend of 5% to 5.5% and an initial conversion premium of 17.5% to 22.5%, according to a market source.

Morgan Stanley is the lead left bookrunner for the registered offering, which carries a greenshoe of $150 million. UBS Investment Bank and BofA Merrill Lynch are also bookrunners.

The mandatory conversion date is July 1, 2021.

Holders may convert at any time prior to the conversion date at the minimum conversion rate, according to the 424B5 filing with the Securities and Exchange Commission. The notes are convertible upon a fundamental change at the fundamental change conversion rate.

The preferreds will be listed for trade on the New York Stock Exchange under the ticker “FTVPrA.”

Proceeds will be used to fund acquisition activities, which may include the acquisition of Johnson & Johnson’s sterilization solutions business.

Fortive is an Everett, Wash.-based diversified industrial conglomerate.

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