Sotera Health Announces Secondary Offering of Common Stock

Rhea-AI Summary

Sotera Health Company (Nasdaq: SHC) has announced a secondary offering of 25,000,000 shares of its common stock. The shares are being sold by affiliates of Warburg Pincus and GTCR , not by the company itself. As a result of this offering, Sotera Health's sponsors are expected to lose their majority ownership, affecting certain sponsor rights. Citigroup is acting as the underwriter for the offering, which will be conducted through various transactions on Nasdaq, over-the-counter, or through negotiated deals. Sotera Health will not receive any proceeds from the offering but will cover the expenses as per its Amended and Restated Registration Rights Agreement.

Positive

• No dilution for existing shareholders as the company is not issuing new shares
• Potential for increased stock liquidity due to larger public float

Negative

• Change in company control structure as sponsors lose majority ownership
• Company bearing the expenses of the offering without receiving proceeds
• Possible short-term stock price pressure due to large volume of shares being sold

Insights

Financial Analyst

This secondary offering of 25 million shares by Warburg Pincus and GTCR is a significant move that will reshape Sotera Health's ownership structure. The divestment by these major shareholders signals a reduction in their control over the company, which could lead to changes in corporate governance and strategy. While the company won't receive any proceeds, this offering may increase the stock's liquidity and potentially broaden the investor base. However, the large volume of shares being sold might put downward pressure on the stock price in the short term. Investors should monitor how this shift in ownership affects the company's direction and performance going forward.

Legal Expert

The secondary offering triggers important legal and governance implications for Sotera Health. With the sponsors ceasing to own a majority stake, there will be changes in sponsor rights as outlined in the company's proxy statement. This could affect board composition, voting rights and other control mechanisms. The company's compliance with SEC regulations in this offering, including the use of a prospectus and the previously filed registration statement, demonstrates proper legal procedure. However, investors should carefully review the prospectus to understand any potential risks or changes in corporate structure that may result from this significant ownership shift.

Market Research Analyst

This offering marks a pivotal moment in Sotera Health's market position. The exit of major private equity firms often signals a maturing company ready for broader public ownership. This could potentially lead to increased analyst coverage and institutional interest. However, the market's reaction will depend on how it interprets the sponsors' decision to reduce their stakes. If viewed positively, it could indicate confidence in the company's ability to operate independently. Conversely, it might raise questions about future growth prospects. The timing and pricing of the offering will be important in determining investor sentiment and the stock's short-term performance.

CLEVELAND, Sept. 04, 2024 (GLOBE NEWSWIRE) -- Sotera Health Company (Nasdaq: SHC) (the “Company”) today announced the launch of a secondary offering (the “Offering”) of 25,000,000 shares of its common stock, par value $0.01 per share. All 25,000,000 shares are being offered for sale by certain affiliates of Warburg Pincus LLC (“Warburg Pincus”) and GTCR LLC (“GTCR”) as selling stockholders. No other entities, and no individuals, are selling shares in the Offering. It is expected that, as a result of the Offering, the Company’s sponsors (affiliates of Warburg Pincus and GTCR) will cease to own a majority of the Company’s outstanding common stock, which will affect certain sponsor rights and related matters. These rights are described in the Company’s most recently filed annual general meeting proxy statement. The Company is not offering any shares in the Offering and will not receive any of the proceeds from the Offering. The Company will pay the expenses of the Offering pursuant to its obligations under its Amended and Restated Registration Rights Agreement.

Citigroup is acting as the underwriter for the Offering. The underwriter will offer the shares from time to time in one or more transactions on the Nasdaq, in the over-the-counter market or through negotiated transactions at market prices or at negotiated prices.

The Offering is being made only by means of a prospectus. Copies of the preliminary prospectus relating to the Offering may be obtained, when available, from: Citigroup, Attention: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, by telephone at 1-800-831-9146.

A registration statement relating to these securities was filed with the Securities and Exchange Commission on February 27, 2024, and became effective automatically.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy these securities, 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.

Forward-looking Statements:

Statements in this press release regarding the Company that are not historical facts are “forward-looking statements” that involve risks and uncertainties. Certain of these risks and uncertainties are described in the Company’s registration statement on Form S-3 filed with the SEC, including under the headings “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” under the headings “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s most recent Annual Report on Form 10-K and under the heading “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. Forward-looking statements made in this release speak only as of the date of this release, and the Company undertakes no obligation to update the information contained in this press release to reflect subsequently occurring events or circumstances, except as required by law.

About Sotera Health:

Sotera Health Company is a leading global provider of mission-critical end-to-end sterilization solutions and lab testing and advisory services for the healthcare industry. Sotera Health goes to market through three businesses – Sterigenics®, Nordion® and Nelson Labs®. Sotera Health is committed to its mission, Safeguarding Global Health®.

INVESTOR RELATIONS CONTACTS:

Jason Peterson
Vice President, Investor Relations and Treasurer, Sotera Health
IR@soterahealth.com

MEDIA CONTACT:

Kristin Gibbs
Chief Marketing Officer, Sotera Health
kgibbs@soterahealth.com

Source: Sotera Health Company

FAQ

How many shares of SHC stock are being offered in the secondary offering?

25,000,000 shares of Sotera Health Company (SHC) common stock are being offered in the secondary offering.

Who are the selling stockholders in Sotera Health's secondary offering?

The selling stockholders are certain affiliates of Warburg Pincus and GTCR , which are Sotera Health's sponsors.

Will Sotera Health (SHC) receive any proceeds from this secondary offering?

No, Sotera Health will not receive any proceeds from the secondary offering. The company is not offering any shares and will only pay the expenses of the offering.

How will the secondary offering affect Sotera Health's ownership structure?

As a result of the offering, Sotera Health's sponsors (affiliates of Warburg Pincus and GTCR) are expected to cease owning a majority of the company's outstanding common stock, which will affect certain sponsor rights.