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Terex Receives Requisite Approvals for Consent Solicitation

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Terex CorporationTEX announced that it has received the requisite consents from holders of its 6.00% Senior Notes due 2021 and 6.50% Senior Notes due 2020 for certain proposed amendments to the indentures governing the Notes. This is in connection with the company's previously announced consent solicitation, on Aug 27, related to its merger with Konecranes Plc, a Finnish public company limited.

The consent solicitation expired at 5:00 p.m., NY time, on Sep 4, 2015. Now that Terex has obtained the requisite consents for each series of Notes, it intends to promptly execute supplemental indentures covering the proposed amendments to the indentures. The terms of the supplemental indentures will not become operative unless and until the remaining conditions to the consent solicitation have been satisfied or waived.

As per its previous announcement, Terex will pay to each holder of record of Notes as on Aug 26, 2015, who delivered a valid consent, a cash fee of $17.50 for each $1,000 principal amount of 2021 Notes and $10.00 for each $1,000 principal amount of 2020 Notes consented to by such holder. Holders of Notes who did not submit consents will not receive a consent fee.

In August, Terex and Konecranes Plc entered into an all stock deal to create a global leader in lifting and material handling solutions, Konecranes Terex Plc. The merger is expected to be completed in the first half of 2016, subject to satisfaction of closing conditions including approval by Terex and Konecranes' shareholders

Konecranes, a world-leading group of Lifting Businesses, caters to a broad range of customers, including manufacturing and process industries, shipyards, ports and terminals. In 2014, KoneCranes' sales totaled $2.7 billion. The group employs approximately 12,000 people at 626 locations across 48 countries.

The merger will result in a stronger and more competitive global lifting and material handling company with pro forma 2014 revenues of $10 billion and EBITDA of $845 million. Upon completion of the transaction, Terex shareholders will own approximately 60% of the combined company and Konecranes shareholders will own the balance.

Terex and KoneCranes have identified annual after-tax synergies of at least $119 million. The deal is expected to be accretive to both companies' shareholders in the first full year. After formation, Konecranes Terex Plc is expected to authorize a $1.5 billion share repurchase program and initial annual dividend of approximately $1.15 per share.

The merger is a strategic fit as it brings together two complementary leaders in cranes, materials handling, and equipment servicing solutions. The increased global scale will provide the new company with a competitive edge over the low-cost emerging market players. It will also increase the company's footprint in key sectors, offering greater opportunity to capitalize on growth trends in the port and industrial sectors as well as services. The new company will boast of a more robust portfolio of complementary products and customer solutions and it will also have scope for further technological advancement with greater emphasis on research and development.

Terex currently holds a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the sector include AO Smith Corp. AOS , Rexnord Corporation RXN and Energous Corporation WATT . While AO Smith and Rexnord sport a Zacks Rank #1 (Strong Buy), Energous carries a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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