Waste management firm Stericycle, Inc.SRCL announced an offering of depositary shares, which will represent a proportional fractional interest in the rights and preferences of its Series A Mandatory Convertible Preferred Stock. The offering is subject to market and other customary conditions.
The company is offering 7 million depositary shares, where each share represents a 1/10th interest in a share of its Mandatory Convertible Preferred Stock. The depositary share holders will be entitled to the rights and preferences of the preferred stock, including dividend, conversion, voting rights and liquidation, subject to the terms of the concerned deposit agreement.
The offering price is likely to be $100.00 per depositary share. Stericycle also plans to grant an option to purchase up to a further 700,000 depositary shares to the underwriters of the offering. Each share of the Mandatory Convertible Preferred Stock will likely be issued with a liquidation preference of $1,000 per share.
If not converted or redeemed earlier, each share of the preferred stock will automatically convert into shares of Stericycle's common stock on the mandatory conversion date, which is expected to be Sep 15, 2018.
The number of common shares that will be issued on conversion will be decided on the basis of the average volume-weighted average price of the company's common stock. The average will be computed over a period of 20 trading days beginning on and including the 23rd scheduled trading day prior to Sep 15, 2018. Other terms of the preferred stock conversion and the applicable dividend rate will be settled after negotiations between the company and the underwriters.
The net proceeds of the offering will be employed to finance Stericycle's acquisition of Shred-it International, Boost GP Corp and Boost Holdings LP.
Stericycle presently carries a Zacks Rank #3 (Hold). Better-ranked stocks that are worth a look now include Waste Management, Inc. WM ,Cintas Corporation CTAS and Swisher Hygiene Inc. SWSH , each sporting a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.