Valvoline Inc. Announces Commencement of Cash Tender Offer for Any and All of Its Outstanding 4.250% Senior Notes Due 2030
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Insights
The announcement by Valvoline Inc. regarding the commencement of a tender offer for its 4.250% senior notes due 2030 represents a strategic financial maneuver that could have implications on the company's capital structure and debt profile. By repurchasing outstanding notes, Valvoline may be aiming to reduce its interest expenses or manage its debt maturities more effectively. This move is often seen as a positive signal to investors, indicating that the company is proactive in managing its liabilities and potentially improving its financial health.
From a financial standpoint, the tender offer's success will depend on the uptake by note holders and the company's ability to finance the repurchase. The offer's attractiveness is determined by the consideration offered relative to the market value of the notes. If the market perceives the terms as favorable, it could lead to a high participation rate, thereby allowing Valvoline to retire a significant portion of its debt ahead of schedule. However, investors should closely monitor the funding of this buyback, as it could affect the company's cash reserves or result in additional borrowing.
The tender offer by Valvoline Inc. may also be viewed within the broader context of the automotive maintenance industry and prevailing economic conditions. The decision to repurchase debt could be a response to the current interest rate environment, with the company possibly capitalizing on lower rates to refinance its debt. Additionally, the move could be indicative of Valvoline's confidence in its future cash flows, suggesting stable demand for automotive maintenance services despite any potential economic headwinds.
Investors should also consider the role of the dealer managers in facilitating the tender offer. The involvement of established financial institutions like Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC could lend credibility to the process and may influence the market's reception of the offer. The terms and conditions, as well as the outcome of the tender offer, could serve as indicators of market sentiment towards Valvoline's creditworthiness and the automotive maintenance sector's financial stability.
Valvoline's tender offer is subject to compliance with securities regulations and the asset sale covenant under the indenture governing the notes. The legal framework within which this offer is being made requires adherence to strict disclosure and procedural requirements, ensuring that the rights of the note holders are protected. The stipulation that the tendered notes may not be withdrawn after the expiration time, except as required by law, underscores the definitive nature of the offer and necessitates careful consideration by the note holders.
Moreover, the exclusion of certain jurisdictions from the tender offer due to local securities laws highlights the complexity of conducting such financial operations on a global scale. It is crucial for investors to understand that the offer's legal intricacies can influence its execution and potentially the overall effectiveness of Valvoline's debt management strategy.
The terms and conditions of the Tender Offer are described in an Offer to Purchase, dated March 14, 2024 (the "Offer to Purchase"). The following table summarizes the material pricing terms for the Tender Offer:
CUSIP/ISIN(1) | Outstanding | Title of Notes | Consideration(2)(3) |
92047W AD3 /
U92147 AB0 / |
|
_____
(1) | CUSIPs/ISINs are provided for the convenience of holders. No representation is made as to the correctness or accuracy of such numbers. |
(2) | Per |
(3) | Does not include accrued and unpaid interest from the last date on which interest has been paid to, but excluding, the Settlement Date, that will be paid on the Notes accepted for purchase. |
The Tender Offer will expire at 5:00 p.m.,
The consummation of the Tender Offer is subject to, and conditioned upon, the satisfaction or waiver of certain conditions described in the Offer to Purchase.
Tendered Notes may be withdrawn at any time at or prior to the Expiration Time. Any Notes validly tendered at or prior to the Expiration Time that are not validly withdrawn at or prior to the Expiration Time may not be withdrawn thereafter, except as required by law.
This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any security. No offer, solicitation, or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.
Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC are the dealer managers (the "Dealer Managers") in the Tender Offer. Global Bondholder Services Corporation has been retained to serve as both the depositary and the information agent (the "Depositary and Information Agent") for the Tender Offer. Questions regarding the Tender Offer should be directed to Citigroup Global Markets Inc. at (800) 558-3745 (toll-free) or (212) 723-6106 (collect), Goldman Sachs & Co. LLC at (800) 828-3182 (toll-free) or (212) 902-5962 (collect) and Morgan Stanley & Co. LLC at (800) 624-1808 (toll-free) or (212) 761-1057 (collect). Requests for copies of the Offer to Purchase and other related materials should be directed to Global Bondholder Services Corporation at (212) 430-3774 or (855) 654-2015 (toll free) or by e-mail at contact@gbsc-usa.com.
None of Valvoline, its board of directors, the Guarantors, the Trustee, the Dealer Managers or the Depositary and Information Agent, makes any recommendation as to whether holders of the Notes should or should not tender any Notes in response to the Tender Offer. The Tender Offer is made only by the Offer to Purchase. The Tender Offer is not being made to holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the Tender Offer is required to be made by a licensed broker or dealer, the Tender Offer will be deemed to be made on behalf of Valvoline by the Dealer Managers or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.
About Valvoline Inc.
Valvoline Inc. (NYSE: VVV) is the quick, easy, trusted leader in automotive preventive maintenance. Valvoline Inc. is creating shareholder value by driving the full potential in our core business, accelerating network growth and innovating to meet the needs of customers and the evolving car parc. With approximately 1,900 service centers throughout
* Based on a survey of more than 900,000 Valvoline Instant Oil Change℠ customers annually
™ Trademark, Valvoline Inc., or its subsidiaries, registered in various countries
SM Service mark, Valvoline Inc., or its subsidiaries, registered in various countries
Forward-Looking Statements
Certain statements in this press release, other than statements of historical fact, are forward-looking statements. Such forward-looking statements may include, without limitation, statements about the expected tender offer and whether we actually commence and consummate the tender offer as planned or at all. Valvoline has identified some of these forward-looking statements with words such as "anticipates," "believes," "expects," "estimates," "is likely," "predicts," "projects," "forecasts," "may," "will," "should," and "intends," and the negative of these words or other comparable terminology. These forward-looking statements are based on Valvoline's current expectations, estimates, projections, and assumptions as of the date such statements are made and are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. Additional information regarding these risks and uncertainties are described in Valvoline's filings with the Securities and Exchange Commission (the "SEC"), including in the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Quantitative and Qualitative Disclosures about Market Risk" sections of Valvoline's most recently filed periodic reports on Forms 10-K and 10-Q, which are available on Valvoline's website at http://investors.valvoline.com/sec-filings or on the SEC's website at http://www.sec.gov. Valvoline assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future, unless required by law.
For Further Information
Investor Inquiries
Elizabeth B. Russell
+1 (859) 357-3155
IR@valvoline.com
Media Inquiries
Angela Davied
media@valvoline.com
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SOURCE Valvoline Inc.
FAQ
What is Valvoline Inc. initiating according to the press release?
What is the Consideration offered per $1,000 principal amount of Notes tendered?
When does the Tender Offer expire?
Who are the Dealer Managers in the Tender Offer?
How can one withdraw Tendered Notes?
