Within a week of releasing its fourth-quarter 2013 results,
) made an announcement to acquire Irving Place Capital's Victor
Technologies Holdings, Inc. This news was coupled with the
company's announcement of public offering of common shares and
BDT Capital Partners converting their preferred share holding
into equity shares of Colfax. At the end of trading on Feb 12,
shares of Colfax gained 1.6% over its previous day's closing
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The acquisition agreement between Colfax and Irving Place Capital
has been valued at $947.3 million, including assumption of debt.
Victor Technologies Holdings is a renowned manufacturer of
advanced cutting, gas control and specialty welding solutions.
Victor Technologies Holdings will compliment Colfax's ESAB
business and will help its expansion in new markets and
applications. Product brands associated with Victor Technologies
Holdings include Victor, Tweco, Cigweld and Stoody. In addition
to these popular brands, Victor Technologies' 2,000 associates
and revenue generation capacity of $500 million will benefit
Colfax's management anticipates the transaction to be accretive
to adjusted earnings per share and free cash flow immediately.
Completion is subject to customary closing conditions.
Concurrent with the acquisition news, Colfax entered into a
conversion agreement with BDT CF Acquisition Vehicle, LLC. BDT
investors hold the company's Series A Perpetual Convertible
Preferred Stock. Per the terms of the agreement, BDT investors
opted for conversion of roughly 13.9 million preferred shares
into 12.2 million common shares of Colfax.
In lieu of the dividend Colfax would have paid on preferred
shares to the investors through Jan 2015, it will pay $23.4
million to BDT investors.
Also, Colfax offered to public roughly 6.5 million common shares.
The underwriters have been given an option to purchase additional
0.975 million shares from Colfax. The proceeds from this offering
together with cash and borrowings will be utilized to fund the
Colfax currently has a market capitalization of $6.6 billion and
holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the
Altra Industrial Motion Corp.
Barnes Group Inc.
The Middleby Corporation
), all of which carry a Zacks Rank #2 (Buy).