GATES ANNOUNCES SECONDARY OFFERING OF 20,000,000 ORDINARY SHARES

Rhea-AI Summary

Gates Industrial plc (NYSE: GTES) has announced a secondary offering of 20,000,000 ordinary shares by certain selling stockholders affiliated with Blackstone Inc. The underwriters have a 30-day option to purchase up to 3,000,000 additional shares. Gates will not receive any proceeds from this offering.

Concurrently, Gates has entered into a share repurchase contract with Citigroup Global Markets Inc. to buy back $125 million of ordinary shares at the same price as the offering. This repurchase is contingent on the offering's closing. Additionally, one of Gates' directors has expressed interest in purchasing shares in the offering.

Citigroup, Goldman Sachs & Co. , and Jefferies are serving as the joint lead book-running managers for the offering.

Positive

• Gates is repurchasing $125 million worth of shares, potentially supporting stock price
• A company director has shown interest in purchasing shares, indicating confidence in the company

Negative

• Large secondary offering of 20 million shares may lead to stock price pressure
• Selling stockholders' divestment might be perceived as lack of confidence in future growth

Insights

Financial Analyst

This secondary offering by Blackstone-affiliated stockholders is a significant move in Gates' ownership structure. The offering of 20 million shares, with an option for 3 million more, signals Blackstone's intention to reduce its stake in Gates. This could potentially increase the stock's public float and liquidity.

Gates' simultaneous $125 million share repurchase is a strategic decision. It demonstrates confidence in the company's valuation and could help offset potential downward pressure on the stock price from the large offering. The repurchase, at the same price as the offering, ensures fairness to both selling and remaining shareholders.

Investors should note that while this transaction doesn't directly impact Gates' operations or financials, it could affect stock price dynamics and ownership structure in the short term.

Market Research Analyst

This offering marks a pivotal moment for Gates' market positioning. The substantial size of the offering could significantly alter the company's shareholder base, potentially attracting new institutional investors and increasing trading volume.

The involvement of major underwriters like Citigroup, Goldman Sachs and Jefferies suggests strong market interest. However, investors should be aware that large secondary offerings can sometimes lead to short-term price volatility.

The director's interest in purchasing shares is a positive signal, potentially indicating insider confidence in the company's prospects. This move, combined with the share repurchase, could help stabilize the stock price post-offering and demonstrate management's commitment to shareholder value.

Legal Expert

The company's careful disclosure about the offering and share repurchase demonstrates strong regulatory compliance. The clear statement that the offering is made by selling stockholders, not Gates itself, is important for investor understanding.

The conditional nature of the share repurchase, dependent on the offering's closing but not vice versa, is a noteworthy legal structure. This arrangement provides flexibility while ensuring transparency.

The extensive information about accessing the prospectus and other SEC filings reflects best practices in securities law compliance. The disclaimer at the end is a standard legal protection, important for avoiding any perception of unlawful solicitation. Investors should always review the full prospectus for complete information.

DENVER, Aug. 15, 2024 /PRNewswire/ -- Gates Industrial Corporation plc (NYSE: GTES, "Gates" or the "Company") announced today that certain selling stockholders affiliated with Blackstone Inc. (the "Selling Stockholders") have commenced a secondary offering of 20,000,000 of Gates' ordinary shares (the "Offering"). In connection with the Offering, the Selling Stockholders intend to grant to the underwriters a 30-day option to purchase up to 3,000,000 additional ordinary shares.

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.

In addition, Gates announced that, in connection with its existing share repurchase program, it has entered into a share repurchase contract with Citigroup Global Markets Inc. to repurchase $125 million of ordinary shares at a price per share equal to the price paid by the underwriters in the Offering and has advised Citigroup Global Markets Inc. to purchase such shares from the Selling Stockholders. The share repurchase is expected to be consummated promptly following the Offering and is conditioned upon the closing of the Offering. The closing of the Offering is not conditioned upon the consummation of the share repurchase.

One of our directors has indicated an interest in purchasing ordinary shares 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, Edgewood, NY 11717 (Tel: 800-831-9146); Goldman Sachs & Co. LLC, Attn: Prospectus Department, 200 West Street, New York, NY 10282 (Tel: 866-471-2526) or by e-mail at prospectus-ny@ny.email.gs.com; or Jefferies LLC, Attn: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022 (Tel: 877-821-7388) or by email at prospectus_department@jefferies.com.

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 more than 130 countries across our four commercial regions: the Americas; Europe, Middle East & Africa; Greater China; and East Asia & India.

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

How many shares are being offered in Gates Industrial 's (GTES) secondary offering?

Gates Industrial (GTES) has announced a secondary offering of 20,000,000 ordinary shares, with an option for underwriters to purchase up to 3,000,000 additional shares.

Will Gates Industrial (GTES) receive any proceeds from the secondary offering?

No, Gates Industrial (GTES) will not receive any proceeds from the secondary offering as the shares are being sold by certain stockholders affiliated with Blackstone Inc.

What is the value of the share repurchase contract Gates Industrial (GTES) has entered into?

Gates Industrial (GTES) has entered into a share repurchase contract to buy back $125 million worth of ordinary shares at the same price as the secondary offering.

Who are the lead book-running managers for Gates Industrial 's (GTES) secondary offering?

Citigroup, Goldman Sachs & Co. , and Jefferies are serving as the joint lead book-running managers for Gates Industrial 's (GTES) secondary offering.