By Abigail W. Adams
Portland, Me., June 27 – Fortive Corp. priced an upsized $1.2 billion, or 1.2 million shares, of series A mandatory convertible preferred stock after the market close on Tuesday at the rich end of talk with a dividend of 5% and an initial conversion premium of 22.5%, according to an FWP filing with the Securities and Exchange Commission.
Price talk had been 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, UBS Investment Bank and BofA Merrill Lynch are bookrunners for the registered offering. Barclays, Citigroup, Goldman Sachs & Co. LLC and US Bancorp were also joint bookrunners.
The greenshoe was upsized to $180 million, or 180,000 shares. The initial size of the deal had been $1 billion with a greenshoe of $150 million.
The mandatory conversion date is July 1, 2021.
The preferreds will be convertible into 13.2979 shares of common stock if the stock is below $75.20 on the mandatory conversion date, or 10.8554 shares if the stock is greater than $92.12.
Holders may convert at any time prior to the conversion date at the minimum conversion rate of 10.8554.
The notes are non-callable. They 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.”
Net proceeds are expected to be $1.16 billion, or $1.34 billion if the greenshoe is exercised in full.
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.
| Issuer: | Fortive Corp.
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| Securities: | Series A mandatory convertible preferred stock
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| Amount: | $1.2 billion, or 1.2 million shares
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| Greenshoe: | $180 million, or 180,000 shares
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| Maturity: | July 1, 2021
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| Bookrunners: | Morgan Stanley (lead left), UBS Investment Bank, BofA Merrill Lynch
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| Co-managers | Barclays, Citigroup, Goldman Sachs & Co. LLC and US Bancorp
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| Dividend: | 5%
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| Price: | Par of $1,000
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| Conversion premium: | 22.5%
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| Conversion price: | $92.12
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| Conversion rate: | 13.2979 if market value is less than $75.20, 10.8554 if greater than $92.12
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| Call options: | Non-callable
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| Pricing date: | June 26
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| Settlement date: | June 29
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| Talk: | Dividend of 5% to 5.5% and an initial conversion premium of 17.5% to 22.5%
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| Listing: | NYSE: FTVPrA
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| Stock symbol: | NYSE: FTV
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| Stock price: | $75.20
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| Market capitalization: | $26.14 billion
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