Fortive Corporation (“Fortive”) (NYSE: FTV) announced that it has priced
its underwritten public offering of 1,200,000 shares, or $1.2 billion
aggregate liquidation preference, of its 5.00% Mandatory Convertible
Preferred Stock, Series A, par value $0.01 per share (“mandatory
convertible preferred stock”), at a public offering price of $1,000 per
share. Fortive has also granted the underwriters an option for a period
of 30 days to purchase up to an additional 180,000 shares, or $180.0
million aggregate liquidation preference, of the mandatory convertible
preferred stock, solely to cover over-allotments.
The issuance of the shares of mandatory convertible preferred stock is
expected to close on June 29, 2018, subject to customary closing
conditions.
Fortive estimates that the net proceeds from the sale of the shares of
the mandatory convertible preferred stock will be approximately $1.16
billion, or approximately $1.34 billion if the underwriters exercise in
full their option to purchase additional shares, in each case after
deducting the underwriting discounts and commissions and estimated
offering costs payable by Fortive.
Fortive intends to use the net proceeds from this offering to fund its
acquisition activities, including acquisitions, if any, that may be
consummated in 2018 or the acquisition of Johnson & Johnson’s
sterilization solutions business used in the fields of low-temperature
terminal sterilization and high-level disinfection. Completion of this
offering is not contingent upon consummation of any acquisition. Fortive
may also use the net proceeds for general corporate purposes, including
repayment of debt, working capital and capital expenditures.
Unless converted earlier at the option of the holder, each share of
mandatory convertible preferred stock will automatically convert on July
1, 2021 (subject to postponement for certain market disruption events),
into between 10.8554 and 13.2979 shares of Fortive’s common stock,
subject to customary anti-dilution adjustments.
Dividends on the mandatory convertible preferred stock will be payable
on a cumulative basis when, as and if declared by Fortive’s board of
directors (or an authorized committee of Fortive’s board of directors),
at an annual rate of 5.00% of the liquidation preference of $1,000 per
share. If declared, these dividends will be paid in cash or, subject to
certain limitations, in shares of Fortive’s common stock or in a
combination of cash and shares of Fortive’s common stock, at Fortive’s
election, on January 1, April 1, July 1 and October 1 of each year,
commencing October 1, 2018, and to, and including, July 1, 2021.
Morgan Stanley & Co. LLC, UBS Investment Bank and BofA Merrill Lynch are
acting as joint book-running managers for the offering. In addition,
Barclays, Citigroup, Goldman Sachs & Co. LLC and US Bancorp are also
acting as joint book-running managers for the offering.
The offering is being made pursuant to an effective registration
statement on Form S-3 (including a prospectus) filed with the U.S.
Securities and Exchange Commission (the “SEC”). Prospective investors
should read the prospectus forming a part of that registration statement
and the prospectus supplement related to the offering and the other
documents that Fortive has filed with the SEC for more complete
information about Fortive and this offering. These documents are
available at no charge by visiting EDGAR on the SEC website at www.sec.gov.
Alternatively, the prospectus and prospectus supplement relating to the
offering, when available, may be obtained from the Morgan Stanley
Prospectus Department at Morgan Stanley & Co. LLC, Attn: Prospectus
Department, 180 Varick Street, 2nd Floor, New York, NY 10014 or from the
UBS Investment Bank Prospectus Department at UBS Investment Bank, Attn:
UBS Prospectus Dept., 1285 Avenue of the Americas 25th Floor, New York,
NY 10019 or by calling toll-free 888-827-7275 or from the BofA Merrill
Lynch Prospectus Department at BofA Merrill Lynch, Attn: Prospectus
Department, 200 North College Street, 3rd Floor, Charlotte, NC
28255-0001 or dg.prospectus_requests@baml.com.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the shares of mandatory convertible
preferred stock, nor shall there be any offer, solicitation or sale of
the shares of mandatory convertible preferred stock in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
jurisdiction.
Forward-Looking Statements
Statements in this release that are not strictly historical, including
statements regarding the terms of the proposed offering, the timing and
completion of the offering, Fortive’s intended use of proceeds, the ASP
Transaction and any other statements regarding events or developments
that Fortive expects or anticipates will or may occur in the future, are
“forward-looking” statements within the meaning of the federal
securities laws. There are a number of important risks and uncertainties
that could cause actual results, developments and business decisions to
differ materially from those suggested or indicated by such
forward-looking statements and you should not place undue reliance on
any such forward-looking statements. These risks and uncertainties
include, among other things, risks and uncertainties relating to capital
markets conditions and completion of the offering, the ability of the
parties to the ASP Transaction to satisfy the conditions to the
acquisition on a timely basis and such parties’ ability to complete the
acquisition on the anticipated terms and schedule, including the ability
to obtain regulatory approvals. Additional information regarding the
factors that may cause actual results to differ materially from these
forward-looking statements is available in Fortive’s SEC filings,
including its Annual Report on Form 10-K for the year ended December 31,
2017 and its Quarterly Report on Form 10-Q for the quarter ended March
30, 2018. These forward-looking statements speak only as of the date of
this release, and Fortive does not assume any obligation to update or
revise any forward-looking statement, whether as a result of new
information, future events and developments or otherwise.
Fortive Corporation
Lisa Curran, 425-446-5000
Vice President, Investor Relations
6920 Seaway Boulevard
Everett, WA 98203