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Fortive greenshoe exercised, ups mandatory convertible preferred stock to $1.38 billion
By Marisa Wong
Morgantown, W.Va., June 29 – Fortive Corp. said the underwriters of its 5% series A mandatory convertible preferred stock exercised their $180 million over-allotment option in full.
This brings the total issue size to $1.38 billion.
Fortive priced an upsized $1.2 billion, or 1.2 million shares, of the series A mandatory convertible preferreds 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%, as previously reported.
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 & Co. LLC, UBS Investment Bank and BofA Merrill Lynch are bookrunners for the registered offering. Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and U.S. Bancorp Investments Inc. also acted as joint bookrunning managers.
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.”
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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