RBC Bearings Incorporated Announces Pricing of 4.375% Senior Notes due 2029 by Roller Bearing Company of America, Inc.

Rhea-AI Summary

RBC Bearings (NASDAQ: ROLL) announced the pricing of a $500 million offering of 4.375% senior notes due 2029, expected to close on October 7, 2021. The proceeds will primarily finance the acquisition of Dodge Mechanical Power Transmission Business from ABB. Until certain escrow conditions are met, the notes will be secured by an escrow account. Post conditions, they will be guaranteed by RBC Bearings and its subsidiaries. The notes will only be available to qualified institutional buyers and aren't registered under the Securities Act.

Positive

• Successfully pricing $500 million senior notes reflects strong market interest.
• Proceeds will support the acquisition of the Dodge business, potentially enhancing revenue streams.

Negative

• The offering of senior notes might increase debt levels and financial obligations.
• Escrow conditions may delay access to funds, impacting immediate cash flow.

OXFORD, Conn.--(BUSINESS WIRE)-- RBC Bearings Incorporated (Nasdaq: ROLL) (“RBC Bearings”), a leading international manufacturer and marketer of highly engineered precision bearings and products for the industrial, defense and aerospace industries, today announced that Roller Bearing Company of America, Inc. (the “Issuer”), a wholly-owned subsidiary of RBC Bearings, has successfully priced an offering of $500.0 million aggregate principal amount of 4.375% senior notes due 2029 (the “Notes”). The offering is expected to close on October 7, 2021, subject to customary closing conditions.

The Notes are being offered in connection with RBC Bearings’ financing of its previously announced pending acquisition of the Dodge Mechanical Power Transmission Business (“Dodge”) of ABB Asea Brown Boveri Ltd. RBC Bearings intends to use the net proceeds from the offering to fund a portion of the cash purchase price for the pending acquisition of Dodge, to pay acquisition-related fees and expenses, and for other general corporate purposes. In addition, substantially concurrently with the closing of the pending acquisition, the Issuer is expected to become the borrower under a new credit agreement.

The Issuer will cause the gross proceeds from the sale of the Notes, plus certain fees and expenses, to be deposited into an escrow account until the date that certain escrow release conditions are satisfied. The escrow release conditions include, among other things, the consummation of the pending acquisition. Prior to the satisfaction of the escrow release conditions, the Notes will be obligations of the Issuer secured by a first-priority security interest in the funds held in the Issuer’s escrow account and will not be guaranteed. Following satisfaction of the escrow release conditions, the Notes will be guaranteed jointly and severally on a senior unsecured basis by RBC Bearings and each of the Issuer’s existing and future wholly-owned domestic subsidiaries that guarantees its new credit facilities.

The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”) or the securities laws of any state, and may not be offered or sold in the United States or to any U.S. person absent registration under the Securities Act, or pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Notes will be offered and sold only to “qualified institutional buyers” in the United States pursuant to Rule 144A of the Securities Act or, outside the United States, to persons other than “U.S. persons” in compliance with Regulation S under the Securities Act.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities referred to in this press release, nor will there be any sale of any such securities, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

About RBC Bearings

RBC Bearings is an international manufacturer and marketer of highly engineered precision bearings and components. Founded in 1919, RBC Bearings is primarily focused on producing highly technical or regulated bearing products and components requiring sophisticated design, testing and manufacturing capabilities for the diversified industrial, aerospace and defense markets. RBC Bearings is headquartered in Oxford, Connecticut.

Forward-Looking Statements

This press release includes forward-looking statements, including statements regarding the completion and timing of the proposed offering, the intended use of the net proceeds from the proposed offering, the consummation of the pending acquisition of Dodge and the terms of the securities being offered. Forward-looking statements represent RBC Bearings’ current expectations regarding future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements. Among those risks and uncertainties are market conditions, including market interest rates, the trading price and volatility of RBC Bearings’ common stock, the satisfaction of the closing conditions related to the pending acquisition of Dodge, and risks relating to RBC Bearings’ business, including those described in periodic reports that RBC Bearings files from time to time with the SEC. RBC Bearings may not consummate the proposed offering described in this press release and, if the proposed offering is consummated, cannot provide any assurances regarding the final terms of the offering or its ability to effectively apply the net proceeds as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and RBC Bearings does not undertake to update the statements included in this press release for subsequent developments, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210923005977/en/

RBC Bearings

Robert M. Sullivan

203-267-5014

rsullivan@rbcbearings.com

Alpha IR Group

Michael Cummings

617-461-1101

investors@rbcbearings.com

Source: RBC Bearings Incorporated

FAQ

What is the purpose of RBC Bearings' $500 million senior notes offering?

The offering aims to finance the acquisition of Dodge Mechanical Power Transmission Business from ABB, as well as cover related fees and expenses.

When is the expected closing date for RBC Bearings' senior notes offering?

The expected closing date is October 7, 2021, pending customary closing conditions.

What are the interest rates and terms of RBC Bearings' senior notes?

The senior notes have an interest rate of 4.375% and are due in 2029.

Who can buy the senior notes offered by RBC Bearings?

The senior notes will be available only to qualified institutional buyers under Rule 144A of the Securities Act.