DENVER - Gates Industrial (NYSE:GTES) Corporation plc (NYSE: GTES), a global manufacturer of power transmission and fluid power solutions, has set the public offering price for 11,635,224 ordinary shares at $19.40 each. This secondary offering, announced by the company, is being conducted by certain selling stockholders affiliated with Blackstone (NYSE:BX) Inc. Gates itself is not selling any shares and will not receive any proceeds from this transaction.
The offering is scheduled to close on November 5, 2024, subject to the fulfillment of customary closing conditions. Goldman Sachs & Co. LLC has been appointed as the book-running manager for the sale.
Investors interested in the offering should refer to the prospectus filed with the Securities and Exchange Commission (SEC), which is available for free on the SEC's EDGAR service, for more detailed information about Gates and the offering. Alternatively, the prospectus can be obtained from Goldman Sachs & Co. LLC upon request.
Gates operates in various sectors of industrial and consumer markets, providing products that are essential to a wide array of applications, from harsh industrial environments to everyday consumer uses. The company's products are distributed in over 130 countries across multiple regions, including the Americas, Europe, the Middle East & Africa, Greater China, and East Asia & India.
The press release included forward-looking statements subject to risks and uncertainties, cautioning that actual results may differ from those projected. Gates has emphasized that no offer or sale of these securities would occur in jurisdictions where such an offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of any such state or jurisdiction.
This news article is based on a press release statement from Gates Industrial Corporation plc .
In other recent news, Gates Industrial Corporation reported mixed results for the third quarter of 2024. Despite a 3.8% decrease in core sales, amounting to $831 million, the company managed to increase its gross margin, with an adjusted EBITDA of $183 million, surpassing both the Factset consensus and Goldman Sachs's estimate. This was largely due to enterprise initiatives and a favorable product mix. Furthermore, the company raised its adjusted earnings per share guidance and returned $125 million to shareholders through share repurchases.
In terms of regional performance, there were declines in North America and the EMEA region, while South America and East Asia, including India, saw core revenue growth. However, these recent developments show Gates Industrial's adaptability in a challenging market environment.
Gates Industrial also announced that stockholders affiliated with Blackstone Inc. have initiated a secondary offering of 11,635,224 ordinary shares. The company itself is not offering any shares and will not receive any proceeds from this sale.
Looking ahead, Gates Industrial projects $40 million in annualized savings from a footprint optimization plan by the end of 2025. The company also hinted at potential for future mergers and acquisitions, while prioritizing stock buybacks. Goldman Sachs maintained a Neutral stance on Gates Industrial, keeping the price target at $21.00.
InvestingPro Insights
Gates Industrial Corporation plc (NYSE: GTES) has shown impressive market performance, with InvestingPro data revealing a robust 76.74% price total return over the past year. This strong performance aligns with the company's decision to proceed with a secondary offering, potentially capitalizing on investor interest.
The company's current market capitalization stands at $4.98 billion, reflecting its significant presence in the industrial sector. With a P/E ratio of 25.48, Gates is trading at a premium compared to some industrial peers, suggesting investor confidence in its future prospects.
InvestingPro Tips highlight that Gates suffers from weak gross profit margins, which could be a concern for potential investors considering the secondary offering. However, analysts predict the company will be profitable this year, potentially offsetting margin concerns.
It's worth noting that Gates does not pay a dividend to shareholders, which may impact its attractiveness to income-focused investors. This aligns with the company's strategy of reinvesting profits for growth, as evidenced by its recent market performance and expansion efforts.
For investors seeking a deeper understanding of Gates Industrial Corporation, InvestingPro offers 11 additional tips, providing a comprehensive analysis of the company's financial health and market position.
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