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INNOVATE Corp. announced the successful results of its rights offering, with 18.1 million basic subscription rights exercised to purchase 5.2 million common stock shares. Lancer Capital agreed to backstop the offering for $19.0 million. The company also sold 25.0 thousand shares of preferred stock to Lancer Capital for $25.0 million.
La INNOVATE Corp. ha annunciato i risultati positivi della sua offerta di sottoscrizione, con l'esercizio di 18,1 milioni di diritti d'opzione base per l'acquisto di 5,2 milioni di azioni ordinarie. Lancer Capital ha accettato di garantire l'offerta per 19,0 milioni di dollari. Inoltre, la società ha venduto 25,0 mila azioni privilegiate a Lancer Capital per 25,0 milioni di dollari.
INNOVATE Corp. anunció los resultados exitosos de su oferta de derechos, con 18.1 millones de derechos de suscripción básicos ejercidos para comprar 5.2 millones de acciones comunes. Lancer Capital acordó respaldar la oferta por $19.0 millones. También, la compañía vendió 25.0 mil acciones preferentes a Lancer Capital por $25.0 millones.
INNOVATE Corp.는 기본 구독 권리 18.1백만 개를 행사하여 5.2백만 주의 보통주를 매입한 권리 제공의 성공적인 결과를 발표했습니다. Lancer Capital은 1,900만 달러에 대한 제안을 지지하기로 합의했습니다. 또한 회사는 2,500만 달러에 Lancer Capital에 우선주 2.5만 주를 판매했습니다.
INNOVATE Corp. a annoncé les résultats réussis de son offre de souscription, avec 18,1 millions de droits de souscription de base exercés pour l'achat de 5,2 millions d'actions ordinaires. Lancer Capital a accepté de soutenir l'offre pour 19,0 millions de dollars. La société a également vendu 25,0 mille actions privilégiées à Lancer Capital pour 25,0 millions de dollars.
INNOVATE Corp. gab die erfolgreichen Ergebnisse seines Bezugsrechtsangebots bekannt, bei dem 18,1 Millionen Basisbezugsrechte ausgeübt wurden, um 5,2 Millionen Stammaktien zu erwerben. Lancer Capital stimmte zu, das Angebot mit 19,0 Millionen Dollar zu unterstützen. Das Unternehmen verkaufte auch 25,0 Tausend Vorzugsaktien an Lancer Capital für 25,0 Millionen Dollar.
Positive
Successful completion of the rights offering with 18.1 million basic subscription rights exercised.
Lancer Capital agreed to backstop the offering for $19.0 million.
Sale of 25.0 thousand shares of preferred stock to Lancer Capital for $25.0 million.
Expected purchase of 15.3 thousand shares of preferred stock under the backstop commitment.
Convertible preferred stock can be converted into common stock contingent on shareholder approval.
Shares of common stock to be issued at a subscription price of $0.70 per whole share.
Negative
None.
Insights
Analyzing the preliminary results of INNOVATE Corp's rights offering, it's important to note the exercise of 18.1 million basic subscription rights. This action, resulting in the purchase of 5.2 million shares of common stock, indicates a significant shareholder commitment to the company. The additional purchase of 0.1 million shares through the over-subscription privilege further substantiates this sentiment. The backstop agreement with Lancer Capital, entailing the purchase of Series C Non-Voting Convertible Participating Preferred Stock, introduces a layer of financial complexity and potential dilution. Investing at a price of $1,000 per preferred share reflects a strategic partnership between the company and its largest shareholder, providing a safety net for the rights offering. The convertible nature of this preferred stock, while contingent on shareholder approval, could lead to future changes in the equity structure. As the common stock will be purchased at $0.70 per share, investors should keep an eye on the share price to assess whether the rights offering represents a discount or premium to current trading levels. The financial infusion from this offering is set to bolster INNOVATE's cash reserves, potentially funding growth initiatives or reducing existing debt. Retail investors should consider the impact of dilution on their holdings, while also acknowledging the vote of confidence from the company's major stakeholders.
From a market perspective, rights offerings are often viewed as a double-edged sword. They can provide companies with a much-needed capital boost but also signal that the company might not have been able to secure financing through more conventional means, such as bank loans or public offerings. The participation rate in INNOVATE's rights offering and the involvement of a significant shareholder like Lancer Capital suggests market confidence in the company's prospects. The offering price of $0.70 per share will likely be scrutinized against the stock's historical performance and future outlook. If the market perceives the subscription price as favorable, it may lead to a positive reaction. However, if the price is deemed too high compared to the company's potential, it could negatively affect investor sentiment. Additionally, the company's stock liquidity may increase due to the additional shares entering the market. This can be a double-edged sword, providing more opportunities for trading but also possibly leading to increased volatility. Investors should weigh these factors in their decision-making process, highlighting the importance of a strategic understanding of such financial moves.
NEW YORK, April 22, 2024 (GLOBE NEWSWIRE) -- INNOVATE Corp. (“INNOVATE” or the “Company”) (NYSE: VATE), a diversified holding company, announced today the preliminary results of its successful rights offering, which expired at 5:00 p.m., New York City time, on April 19, 2024 (the “expiration date”). According to Computershare Trust Company, N.A. (the “subscription agent”), as of the expiration date, 18.1 million basic subscription rights were exercised to purchase an aggregate of 5.2 million shares of common stock and 0.1 million additional shares of common stock were subscribed for under the over-subscription privilege, subject to proration.
Further, in accordance with the Investment Agreement (the “Investment Agreement”) entered into by the Company with Lancer Capital LLC (“Lancer Capital”), an investment fund led by Avram Glazer, the Chairman of the Board of Directors of the Company and the Company’s largest stockholder, Lancer Capital agreed to partially backstop the rights offering in an amount not to exceed $19.0 million by purchasing newly issued Series C Non-Voting Convertible Participating Preferred Stock, par value $0.001 per share (the “preferred stock”). Based on the preliminary results, we expect that 15.3 thousand shares of preferred stock at a price of $1,000 per share will be purchased under the backstop commitment. This includes 6.3 thousand shares of preferred stock to be purchased at the upcoming closing and 9.0 thousand shares already purchased as part of an equity advance arrangement under the Investment Agreement (the “equity advance”). On March 28, 2024, the Company issued and sold 25.0 thousand shares of the preferred stock to Lancer Capital for an aggregate purchase price of $25.0 million under the equity advance. The remaining 16.0 thousand shares of preferred stock purchased under the equity advance are part of the previously announced concurrent private placement. The preferred stock can be convertible into common stock at the price equivalent to the subscription price under the rights offering contingent on shareholder approval, which will be voted on at the next annual meeting.
The shares of common stock to be issued at the closing of the rights offering will be purchased at the subscription price of $0.70 per whole share. The Company expects the subscription agent to distribute the shares of common stock and the proceeds from the rights offering on or about April 24, 2024, subject to customary closing conditions.
The results of the rights offering are preliminary and subject to change pending finalization of subscription procedures by the subscription agent. The Company expects to issue a press release on April 24, 2024, to announce the final results of the rights offering.
The Company will receive aggregate gross proceeds of approximately $35.0 million from the rights offering and concurrent private placement, and expects to use the proceeds for general corporate purposes, including debt service and for working capital.
If a holder did not exercise its subscription rights prior to the expiration date, such rights have expired and are void and have no value. Investors who have participated in the rights offering should expect to see the shares of common stock issued to them in uncertificated book-entry form. Any excess subscription payments received by subscription agent will be returned by the subscription agent to investors, without interest or deduction, through the same method by which they participated in the rights offering.
The rights offering was made pursuant to INNOVATE’s effective shelf registration statement on Form S-3, filed with the SEC on September 29, 2023, and declared effective on October 6, 2023, and a prospectus supplement containing the detailed terms of the rights offering filed with the SEC on March 8, 2024, as amended by that certain Amendment No. 1 to the prospectus supplement, filed with the SEC on March 25, 2024, and further amended by that certain Amendment No. 2 to the prospectus supplement, filed with the SEC on April 9, 2024. The information in this press release is not complete and is subject to change, including with respect to the expected closing date of the rights offering. This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities (including without limitation the preferred stock to be issued and sold in the concurrent private placement), nor shall there be any offer, solicitation or sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful under the securities laws of such state or jurisdiction. The rights offering was made only by means of a prospectus and a related prospectus supplement, copies of which were distributed to all eligible rights holders as of the rights offering record date and may also be obtained free of charge at the website maintained by the SEC at www.sec.gov or by contacting the information agent for the rights offering.
The preferred stock to be issued to Lancer Capital pursuant to the backstop commitment and the concurrent private placement will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
About INNOVATE
INNOVATE Corp. is a portfolio of best-in-class assets in three key areas of the new economy – Infrastructure, Life Sciences and Spectrum. Dedicated to stakeholder capitalism, INNOVATE employs approximately 4,000 people across its subsidiaries. For more information, please visit: www.INNOVATECorp.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release contains, and certain oral statements made by our representatives from time to time may contain, forward-looking statements regarding the proposed rights offering, including, among others, statements related to the expected timing, eligible offerees, backstop purchasers and expectations regarding participation in the rights offering, the use of proceeds from the rights offering, the size of the rights offering and other terms of the rights offering, all of which involve risks, assumptions and uncertainties, many of which are outside of the Company’s control, and are subject to change. Accordingly, no assurance can be given that the rights offering will be consummated on the terms described above or at all. All forward-looking statements speak only as of the date made, and unless legally required, INNOVATE undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Contact:
Solebury Strategic Communications Anthony Rozmus ir@innovatecorp.com (212) 235-2691
FAQ
What were the results of INNOVATE Corp.'s rights offering?
INNOVATE Corp. announced that 18.1 million basic subscription rights were exercised to purchase 5.2 million common stock shares.
Who agreed to backstop the rights offering for INNOVATE Corp.?
Lancer Capital agreed to backstop the rights offering for $19.0 million.
How many shares of preferred stock did INNOVATE Corp. sell to Lancer Capital?
INNOVATE Corp. sold 25.0 thousand shares of preferred stock to Lancer Capital for $25.0 million.
What is the price at which the convertible preferred stock can be converted into common stock?
The convertible preferred stock can be converted into common stock at a price equivalent to the subscription price under the rights offering, contingent on shareholder approval.
At what price will the shares of common stock be issued in the rights offering?
The shares of common stock will be issued at a subscription price of $0.70 per whole share.
