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Griffon Prices 8M Underwritten Public Common Share Offering

Griffon Corporation GFF yesterday announced the pricing of its common stock offering of 8 million shares to the public. Also, the underwriters have been offered to buy additional shares.

Notably, on Aug 11, the company communicated its intention to offer common shares. It is worth mentioning here that Griffon’s shares declined 8.9% in the past two days. The trading session closed at $21.92.

Inside the Headlines

As noted, the offerings to the public have been priced at $21.50 per share.

Also, the company along with a shareholder that wishes to sell some of Griffon shares has provided underwriters an option to buy an additional 0.7 million of its common share in the next 30 days. Similarly, an offer to purchase an extra 0.5 million has been extended to the underwriters by the selling shareholders. The public offer price of $21.50 minus underwriting commissions and discounts will be the price applicable for underwriters.

Griffon’s outstanding shares are estimated to be 55.4 million after the completion of the 8-million common share offering, assuming no purchases are made by the underwriters. Notably, the company had 43.8 million diluted common shares outstanding at the end of third-quarter fiscal 2020 (ended June 2020).

It intends to use the net proceeds raised from the offering to reduce its borrowings under the revolving credit facility, generate corporate purposes, satisfy working capital needs, and for the payment of expenses and fees. However, the selling shareholders will receive their share of proceeds.

Upon the fulfillment of customary closing conditions, the company anticipates the common share offerings to close on Aug 18, 2020.

Fund-raising Actions in 2020

In June, Griffon raised $145.4 million from the offering of $150 million worth of 5.75% senior notes due to mature on Mar 1, 2028. Along with its available cash, the company intends to use the proceeds to reduce its debts via the redemption of $150 million worth of 5.25% senior notes due to expire in 2022. Also, it intends on using the funds for the payment of expenses and fees as well as accrued interest related to the 2022 notes.

Also, Griffon closed the offering of $850 million worth of 5.75% senior notes due 2028. Part of the proceeds from the offering was used for repurchasing notes due 2022.

Zacks Rank, Estimate Trend and Price Performance

Griffon currently has a market capitalization of $1.1 billion and sports a Zacks Rank #1 (Strong Buy) at present.

The company’s shares have gained 44.1% in the past three months as compared with the industry’s growth of 23.5%.




In the past 30 days, the Zacks Consensus Estimate for its earnings has been raised by 76.7% to $1.52 per share for fiscal 2020 (ending September 2020) and by 104.8% to $1.72 per share for fiscal 2021 (ending September 2021).

Griffon Corporation Price and Consensus

 

Griffon Corporation Price and Consensus
Griffon Corporation Price and Consensus

Griffon Corporation price-consensus-chart | Griffon Corporation Quote

Some other companies in the industry, which have raised funds primarily through debt offerings year to date, are Danaher Corporation DHR, General Electric Company GE and Carlisle Companies Incorporated CSL. While Danaher currently sports a Zacks Rank #1, General Electric presently has a Zacks Rank #4 (Sell) and Carlisle Companies carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, earnings estimates for Danaher have improved for the current year, while declined for General Electric and Carlisle Companies. Further, positive earnings surprise, on average, for the last four quarters was 10.83% for Danaher, 4.47% for General Electric and 24.49% for Carlisle Companies.

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