MILWAUKEE - The Manitowoc Company, Inc. (NYSE:MTW), a capital goods manufacturer, has announced the pricing of a private offering of $300 million in senior secured second lien notes with a 9.250% annual interest rate, maturing in 2031. The notes, issued at face value, are set to be guaranteed by Manitowoc's domestic subsidiaries, which also back the company's asset-based revolving credit facility, recently increased by $50 million to $325 million. The transaction is expected to close on September 19, 2024, contingent on market conditions and the finalization of the amended credit facility.
The proceeds from the offering, estimated at $295.5 million after deductions, are intended for the redemption of all outstanding 9.00% Senior Secured Second Lien Notes due 2026, alongside related fees and expenses. This offering is targeted at qualified institutional buyers in the U.S. and certain non-U.S. persons abroad, in compliance with Rule 144A and Regulation S under the Securities Act of 1933. The notes and guarantees will not be registered under the Securities Act, and unless registered, cannot be offered or sold in the U.S. except under an exemption.
This press release does not constitute an offer to sell or a solicitation to buy the notes or any other securities, and is not a redemption notice for existing notes. The company's statements regarding the offering and its anticipated use of proceeds are forward-looking and subject to change due to various factors, including market conditions and regulatory requirements.
The company has highlighted potential risks that may impact its financial condition and market performance, including macroeconomic challenges, supply chain issues, geopolitical events, and changing customer demands. Manitowoc has emphasized its focus on operational efficiencies, cash management, and strategic opportunities to improve profitability.
This news is based on a press release statement and does not include any offer to purchase or solicitation of an offer to sell the existing notes.
In other recent news, The Manitowoc Company, a global manufacturer of cranes and lifting solutions, has experienced significant financial shifts. The company reported a 22% year-over-year decline in orders during its Second Quarter 2024 Earnings Conference Call. This drop, attributed to geopolitical uncertainty, supply chain disruptions, and a slowdown in the European tower crane business, led to a decrease in net sales and adjusted EBITDA, falling short of expectations. As a result, Manitowoc revised its full-year 2024 guidance, projecting net sales to be between $2.175 billion and $2.25 billion.
In addition to these financial developments, Manitowoc has initiated a private offering of $300 million in senior secured second lien notes due 2031. The proceeds from this offering, combined with other available funds, will be used to redeem all of its outstanding 9.00% Senior Secured Second Lien Notes due 2026 and cover related fees and expenses. The remainder will be used for general corporate purposes.
These recent developments come amid a challenging economic climate, with inflation, interest rate hikes, and supply chain issues impacting the company's ability to convert its backlog into revenue. Despite these challenges, Manitowoc remains optimistic about long-term opportunities, particularly in infrastructure and aftermarket growth. However, according to Tami Zakaria of JPMorgan, the increase in interest rates has affected demand for cranes.
InvestingPro Insights
The Manitowoc Company, Inc. (NYSE:MTW) has recently made headlines with its strategic financial maneuvering through the pricing of a substantial private offering. In light of this development, a glance at InvestingPro's real-time data reveals a mixed financial landscape for the company. As of the last twelve months leading up to Q2 2024, Manitowoc boasts a market capitalization of $323.43 million, suggesting a moderate size within its sector. Despite a challenging revenue growth rate of -0.62%, the company maintains a gross profit margin of 17.85%, indicating its ability to retain a significant portion of sales as gross profit.
InvestingPro Tips highlight that Manitowoc is trading at a low Price/Book multiple of 0.55, potentially signaling undervaluation relative to its assets. Additionally, the company's P/E ratio stands at 37.83, which adjusts to a more attractive 10.38 when considering near-term earnings growth. This could point to potential for investors willing to look beyond immediate market sentiment. It's worth noting that Manitowoc's stock price has experienced volatility, with a significant hit over the last week, month, and six-month periods, reflecting a price decrease of 8.42%, 15.29%, and 30.08%, respectively.
For investors seeking a deeper dive into Manitowoc's financial health and future prospects, InvestingPro offers additional insights. There are currently 15 more InvestingPro Tips available for Manitowoc, which could provide a more comprehensive understanding of the company's position and potential investment opportunities. These tips can be accessed through InvestingPro's platform, which includes detailed analyses and expert commentary.
As Manitowoc navigates the complexities of its industry and the broader economic environment, these InvestingPro metrics and tips may serve as valuable tools for investors considering the company's debt offering and its implications for future financial performance.
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