The Middleby Corporation (Nasdaq: MIDD; “Middleby” or the
“Company”), a leading worldwide manufacturer of equipment for the
commercial foodservice, food processing and residential kitchen
industries, today announced that it has priced $650 million
aggregate principal amount of 1.00% convertible senior notes due
2025 (the “notes”). The principal amount of the offering was
increased from the previously announced offering size of $550
million. The notes will be sold only to persons reasonably believed
to be qualified institutional buyers pursuant to Rule 144A under
the Securities Act of 1933, as amended. Middleby also granted the
initial purchasers of the notes a 13-day option to purchase up to
an additional $97.5 million aggregate principal amount of the
notes. The offering is expected to close on August 21, 2020,
subject to customary closing conditions.
The notes will be senior, unsecured obligations of Middleby, and
will bear interest at a rate of 1.00% per annum, payable
semiannually in arrears on March 1 and September 1 of each year,
beginning on March 1, 2021. The notes will mature on September 1,
2025 unless they are redeemed, repurchased or converted prior to
such date in accordance with their terms. Prior to the close of
business on the business day immediately preceding June 1, 2025,
the notes will be convertible at the option of holders only during
certain periods and upon satisfaction of certain conditions. On or
after June 1, 2025, the notes will be convertible at the option of
the holders at any time until the close of business on the second
scheduled trading day immediately preceding the maturity date. Upon
conversion, Middleby will pay cash up to the aggregate principal
amount of the notes to be converted and pay or deliver, as the case
may be, cash, shares of Middleby common stock or a combination of
cash and shares of Middleby common stock, at Middleby’s election,
in respect of the remainder, if any, of Middleby’s conversion
obligation in excess of the aggregate principal amount of the notes
being converted.
The notes will have an initial conversion rate of 7.7746 shares
of Middleby common stock per $1,000 principal amount of notes
(subject to adjustment for certain events), representing an initial
effective conversion price of approximately $128.62 per share. The
initial conversion price of the notes represents a premium of
approximately 33% to the $96.71 per share closing price of Middleby
common stock on August 18, 2020.
Middleby estimates that the net proceeds from the offering will
be approximately $633.9 million (or approximately $729.2 million if
the initial purchasers exercise in full their option to purchase
additional notes) after deducting the initial purchasers’ discount
and estimated offering expenses payable by Middleby. Middleby
expects to use the net proceeds from the offering of the notes to
prepay a portion of its term loan obligations owed under its
existing credit facility, which the Company also expects to amend
concurrently with this offering as previously announced, to pay the
cost of the capped call transactions described below and for
general corporate purposes, including the financing of its
operations, the potential repayment of additional indebtedness and
potential acquisitions and other strategic transactions.
Middleby may redeem all or any portion of the notes, at its
option, on or after September 5, 2023 and prior to the 41st
scheduled trading day immediately preceding the maturity date, at a
redemption price equal to 100% of the principal amount of the notes
to be redeemed, plus accrued and unpaid interest thereon, if the
last reported sale price of Middleby common stock has been at least
130% of the conversion price then in effect for at least 20 trading
days (whether or not consecutive) during any 30 consecutive trading
day period (including the last trading day of such period) ending
on, and including, the trading day immediately preceding the date
on which Middleby provides written notice of redemption.
In connection with the pricing of the notes, Middleby has
entered into privately negotiated capped call transactions with one
or more of the initial purchasers of the notes and/or their
respective affiliates and/or other financial institutions (the
“capped call counterparties”). The capped call transactions
initially cover, subject to customary anti-dilution adjustments,
the number of shares of Middleby common stock that initially
underlie the notes, assuming the initial purchasers do not exercise
their option to purchase additional notes. The cap price of the
capped call transactions is initially approximately $207.93 per
share of Middleby common stock, representing a premium of 115%
above the last reported sale price of $96.71 per share of Middleby
common stock on August 18, 2020, and is subject to certain
adjustments under the terms of the capped call transactions. The
capped call transactions are expected generally to reduce potential
dilution to Middleby common stock upon conversion of the notes
and/or offset the potential cash payments that Middleby could be
required to make in excess of the principal amount of any converted
notes upon conversion thereof, with such reduction and/or offset
subject to a cap. If the initial purchasers exercise their option
to purchase additional notes, Middleby expects to enter into
additional capped call transactions with the capped call
counterparties that are expected generally to offset potential
dilution and/or potential cash payments relating to additional
notes issued upon exercise of the option to purchase additional
notes.
In connection with establishing their initial hedges of the
capped call transactions, the capped call counterparties have
advised Middleby that they and/or their respective affiliates
expect to enter into various derivative transactions with respect
to Middleby common stock and/or purchase Middleby common stock
concurrently with, or shortly after, the pricing of the notes. This
activity could increase (or reduce the size of any decrease in) the
market price of Middleby common stock or the notes concurrently
with, or shortly after, the pricing of the notes.
In addition, the capped call counterparties and/or their
respective affiliates may modify their hedge positions by entering
into or unwinding various derivatives with respect to Middleby
common stock and/or purchasing or selling Middleby common stock,
the notes or other of Middleby’s securities or instruments (if any)
in secondary market transactions following the pricing of the notes
and prior to the maturity of the notes (and are likely to do so
during any observation period related to a conversion of a note or
following any issuance of a notice of redemption with respect to
the notes). This activity could affect the market price of Middleby
common stock or the notes, which could affect noteholders’ ability
to convert the notes and, to the extent the activity occurs during
any observation period related to a conversion of notes, it could
affect the amount and value of the consideration that noteholders
will receive upon conversion of such notes.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities (including the shares of
Middleby common stock, if any, into which the notes are
convertible) and shall not constitute an offer, solicitation or
sale in any jurisdiction in which such offer, solicitation or sale
is unlawful. Any offers of the notes (and the shares of Middleby
common stock, if any, into which the notes are convertible) will be
made only to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended, by means of a private
offering memorandum.
The offer and sale of the notes and any shares of Middleby
common stock issuable upon conversion of the notes have not been
registered under the Securities Act of 1933, as amended, or any
state securities laws, and the notes and any such shares may not be
offered or sold in the United States absent registration or an
applicable exemption from such registration requirements.
About The Middleby
Corporation
The Middleby Corporation is a global leader in the foodservice
equipment industry. The Company develops, manufactures, markets and
services a broad line of equipment used in the commercial
foodservice, food processing, and residential kitchen equipment
industries. The Company's leading equipment brands serving the
commercial foodservice industry include Anets®, APW Wyott®, Bakers
Pride®, Beech®, BKI®, Blodgett®, Blodgett Combi®, Blodgett Range®,
Bloomfield®, Britannia®, Carter-Hoffmann®, Celfrost®, Concordia®,
CookTek®, Crown®, CTX®, Desmon®, Deutsche Beverage®, Doyon®,
Eswood®, EVO®, Firex®, Follett®, frifri®, Giga®, Globe®,
Goldstein®, Holman®, Houno®, IMC®, Induc®, Ink Kegs®, Jade®,
JoeTap®, Josper®, L2F®, Lang®, Lincat®, MagiKitch'n®, Market
Forge®, Marsal®, Middleby Marshall®, MPC®, Nieco®, Nu-Vu®,
PerfectFry®, Pitco®, QualServ®, RAM®, Southbend®, Ss Brewtech®,
Star®, Starline®, Sveba Dahlen®, Synesso®, Taylor®, Toastmaster®,
TurboChef®, Ultrafryer®, Varimixer®, Wells® and Wunder-Bar®. The
Company’s leading equipment brands serving the food processing
industry include Alkar®, Armor Inox®, Auto-Bake®, Baker Thermal
Solutions®, Burford®, Cozzini®, CVP Systems®, Danfotech®, Deutsche
Process®, Drake®, Emico®, Glimek®, Hinds-Bock®, Maurer-Atmos®, MP
Equipment®, M-TEK®, Pacproinc®, RapidPak®, Scanico®, Spooner
Vicars®, Stewart Systems®, Thurne® and Ve.Ma.C.®. The Company’s
leading equipment brands serving the residential kitchen industry
include AGA® AGA Cookshop®, Brava®, EVO®, Fired Earth®, Heartland®,
La Cornue®, Leisure Sinks®, Lynx®, Marvel®, Mercury®, Rangemaster®,
Rayburn®, Redfyre®, Sedona®, Stanley®, TurboChef®, U-Line® and
Viking®.
Forward-Looking
Statements
Statements in this press release or otherwise attributable to
the Company regarding the Company’s business which are not
historical facts are forward-looking statements including, among
other things, statements relating to the timing of the proposed
offering, the proposed terms of the offering and the intended use
of the net proceeds from the offering are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. The Company cautions investors that such statements are
estimates of future performance and are highly dependent upon a
variety of important factors that could cause actual results to
differ materially from such statements. Any forward-looking
statement speaks only as of the date hereof, and the Company does
not undertake any obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as required by law.
For a discussion of some of the risks and important factors that
could affect such forward-looking statements, see the sections
entitled “Forward Looking Statements” and “Risk Factors” in the
offering memorandum related to the offering, as well as the section
entitled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” incorporated by reference in
the offering memorandum related to the offering from the Company’s
most recent annual and quarterly reports and other filings filed
with the U.S. Securities and Exchange Commission. New risks and
uncertainties emerge from time to time, and it is not possible for
the Company to predict or assess the impact of every factor that
may cause its actual results to differ from those contained in any
forward-looking statements. Forward-looking statements contained
herein speak only as of the date of this press release, and
Middleby expressly disclaims any obligation to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in Middleby's expectations with regard
thereto or change in events, conditions or circumstances on which
any statement is based.
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version on businesswire.com: https://www.businesswire.com/news/home/20200818005844/en/
Investor and Public Relations: Darcy Bretz (847) 429-7756
dbretz@middleby.com
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