Gates Announces Pricing of Secondary Offering of 17,500,000 Ordinary Shares
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Insights
The secondary offering of 17,500,000 ordinary shares by Gates Industrial Corporation's selling stockholders, affiliated with Blackstone Inc., represents a significant liquidity event for the involved parties. The granting of a 30-day option to purchase additional shares to the underwriters indicates a potential for increased liquidity and a buffer for market demand fluctuations. This event may influence Gates' stock price due to the potential dilution of existing shares, although the company itself is not issuing new shares nor receiving proceeds from the sale.
The involvement of prominent financial institutions as joint lead book-running managers, including Citigroup and Goldman Sachs, suggests a strong underwriting process and could be indicative of confidence in the company's market position and the perceived quality of the offering. The market's reception to this offering could provide insights into investor sentiment regarding the industrial sector and Gates' valuation. In the short term, the share price may be volatile as the market absorbs the additional share supply. Long-term implications will depend on the use of proceeds by the selling stockholders and the overall performance of Gates post-offering.
The strategic timing of Gates' share repurchase, in conjunction with the secondary offering, is noteworthy. It signals to the market that the company believes its shares are undervalued. By repurchasing $50 million worth of shares at the same price as the secondary offering, Gates is effectively neutralizing some of the dilutive effects of the offering on existing shareholders. This could be perceived positively by the market, as it reflects a management decision to invest in the company's own stock, potentially bolstering investor confidence.
Additionally, the indication of interest from certain directors to purchase shares in the offering is a gesture that may be interpreted as a vote of confidence in the company's future by its leadership. However, it's important to note that such indications are not guaranteed commitments and may not materialize into actual transactions. The actual impact of these purchases, or the lack thereof, will only be measurable post-offering.
The filing of a registration statement with the SEC is a critical legal step in the offering process, ensuring transparency and regulatory compliance. Prospective investors are encouraged to review these documents for a comprehensive understanding of the offering's terms, risks and the company's financial health. This level of disclosure is mandated by securities law to protect investors and maintain fair markets. The legal framework surrounding such offerings is designed to provide a level playing field for all market participants and to prevent insider trading and other fraudulent activities.
It is also significant to note the conditions set forth for the share repurchase, which is contingent upon the closing of the offering. This conditionality ensures that the repurchase aligns with the company's liquidity and market conditions post-offering, which is a safeguard for the company and its shareholders.
Gates is not offering any ordinary shares in the Offering and will not receive any proceeds from the sale of ordinary shares in the Offering. Citigroup, Goldman Sachs & Co. LLC, and Jefferies are serving as the joint lead book-running managers of, and as representatives of the underwriters for, the Offering. Barclays, Morgan Stanley, UBS Investment Bank, BMO Capital Markets, Evercore ISI, Mizuho and RBC Capital Markets are also serving as joint book-running managers for the Offering.
In addition, as previously announced, in connection with its existing share repurchase program, Gates has entered into a share repurchase contract with Citigroup Global Markets Inc. to repurchase
Certain of our directors have also indicated an interest in purchasing approximately 1,050,000 ordinary shares in the Offering. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell fewer shares to such individuals in the Offering.
The Company has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (the "SEC") for the Offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the Offering. You may get these documents for free by visiting EDGAR on the SEC's website at www.sec.gov. Alternatively, the Company, any underwriter or any dealer participating in the Offering will arrange to send you the prospectus if you request it by contacting Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue,
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Gates:
Gates is a global manufacturer of innovative, highly engineered power transmission and fluid power solutions. Gates offers a broad portfolio of products to diverse replacement channel customers, and to original equipment ("first-fit") manufacturers as specified components. Gates participates in many sectors of the industrial and consumer markets. Our products play essential roles in a diverse range of applications across a wide variety of end markets ranging from harsh and hazardous industries to everyday consumer applications including virtually every form of transportation. Our products are sold in over 130 countries across our four commercial regions: the
Forward‐Looking Statements and Information:
This press release contains forward-looking statements, which involve risks and uncertainties. Forward-looking statements include all statements that are not historical facts. In some cases you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "predicts," "intends," "trends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Forward-looking statements are based on the Company's current expectations and actual results may differ materially. Other risks and uncertainties are more fully described in the section entitled "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2023, as filed with the SEC, as such factors may be updated from time to time in the Company's periodic filings with the SEC. Investors are urged to consider carefully the disclosure in our filings with the SEC, which are accessible on the SEC's website at www.sec.gov. Gates undertakes no obligation to update or supplement any forward-looking statements as a result of new information, future events or otherwise, except as required by law.
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SOURCE Gates Industrial Corporation plc
FAQ
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