Generac Adjusts Proposed Refinancing and Dividend Recapitalization
May 21 2012 - 6:04PM
Business Wire
Generac Holdings Inc. (NYSE: GNRC, the “Company”), a designer
and manufacturer of generators and other engine powered products,
announced today that it was adjusting its previously disclosed
recapitalization plan in light of recent financing market
conditions. The Company has now determined that it will decrease
the total size of its previously announced $1.2 billion financing
and will not proceed with its private offering of unsecured notes.
The Company instead expects to increase the amount of new senior
secured debt to approximately $900 million. If incurred, the
Company will use the proceeds of this new debt financing together
with cash on its balance sheet to refinance its existing senior
secured credit facility and to pay a special cash dividend of up to
$6.00 per share on its common stock. The Company still expects to
replace its current $150 million unfunded revolving credit facility
with a similar sized asset-based revolving line.
“We believe this revised transaction structure is a disciplined
approach towards creating long-term shareholder value and
represents an attractive return of capital to shareholders,” said
Aaron Jagdfeld, President and Chief Executive Officer. “Given our
track record of strong free cash flow generation, we are confident
this new capital structure will allow us to further invest in our
organic growth initiatives and will provide the flexibility for
potential acquisitions in the future.”
The declaration of the special cash dividend remains subject to
market and other conditions, and will not occur unless the new
senior secured credit facility is finalized on acceptable terms.
Assuming that this financing is obtained, the Company expects its
Board of Directors to declare and the Company to pay the special
dividend by or shortly after the end of the second quarter of
2012.
Forward-looking Information
Certain statements contained in this news release, as well as
other information provided from time to time by Generac Holdings
Inc. or its employees, may contain forward looking statements that
involve risks and uncertainties that could cause actual results to
differ materially from those in the forward looking statements.
Forward-looking statements give Generac's current expectations and
projections relating to the Company's financial condition, results
of operations, plans, objectives, future performance and business.
You can identify forward-looking statements by the fact that they
do not relate strictly to historical or current facts. These
statements may include words such as "anticipate," "estimate,"
"expect," "project," "plan," "intend," "believe," "confident,"
"may," "should," "can have," "likely," "future" and other words and
terms of similar meaning in connection with any discussion of the
timing or nature of future operating or financial performance or
other events.
Any such forward looking statements are not guarantees of
performance or results, and involve risks, uncertainties (some of
which are beyond the Company's control) and assumptions. Although
Generac believes any forward-looking statements are based on
reasonable assumptions, you should be aware that many factors could
cause outcomes to differ materially from those anticipated in any
forward-looking statements. In particular, the forward looking
statements contained in this press release are subject to the risk
that the Company will not be able to obtain the financing discussed
above on acceptable terms. In addition, the forward-looking
statements regarding our future performance are subject to the
risks and uncertainties identified in our Annual Report on Form
10-K for the year ended December 31, 2011 and other filings made
with the Securities and Exchange Commission.
Any forward-looking statement made by Generac in this press
release speaks only as of the date on which it is made. Generac
undertakes no obligation to update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by law.
SOURCE: Generac Holdings Inc.
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