NORWALK, Conn. - Terex Corporation (NYSE:TEX), a global manufacturer of materials processing machinery and aerial work platforms, announced its intention to offer $750 million in senior notes due 2032 in a private offering, exempt from the registration requirements of the Securities Act of 1933. This move is aimed at financing the acquisition of assets from Dover Corporation (NYSE:DOV)'s Environmental Solutions Group (ESG), as well as covering related fees and expenses.
The notes, along with the related guarantees, will be offered only to qualified institutional buyers and certain non-U.S. persons outside the United States. Terex has not registered the notes under the Securities Act or any state securities laws, and they cannot be offered or sold in the U.S. without registration or an exemption.
In conjunction with the private offering, Terex is also seeking to amend its existing credit agreement. The amendment aims to increase its revolving credit facilities from $600 million to $800 million and extend the maturity date to coincide with the fifth anniversary of the acquisition's closing. Additionally, Terex plans to establish a new term loan facility that will mature on the seventh anniversary of the closing, with the expectation of incurring term loans totaling up to $1,250 million.
However, there is no guarantee that Terex will successfully complete the private offering or the amendment on favorable terms, or at all. The company's forward-looking statements regarding the completion and timing of the private offering, the amendment, and the acquisition are subject to various risks and uncertainties. These include factors detailed in Terex's SEC filings, such as its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and its Quarterly Report for the period ending June 30, 2024.
This announcement, based on a press release statement, does not constitute an offer to sell the notes or related guarantees. Terex specializes in products that support maintenance, manufacturing, energy, recycling, and construction applications, with a focus on environmentally friendly solutions, including electric and hybrid products. The company operates globally with manufacturing facilities in North America, Europe, Australia, and Asia.
In other recent news, Terex Corporation has revised its 2024 earnings outlook, now anticipating adjusted earnings per share to fall between $5.80 and $6.20, with projected revenues of $4.85 to $5.05 billion. This adjustment was made in response to global channel partners adapting more quickly than anticipated, leading to reduced sales volumes. The company has also cleared a regulatory hurdle in its acquisition of Environmental Solutions Group from Dover Corporation, expecting the deal to close later this year. In addition, Terex has expanded its credit facilities to support this acquisition, involving major financial institutions such as UBS, Bank of America, Barclays, and JPMorgan Chase (NYSE:JPM).
The company reported robust second quarter results for fiscal year 2024, with revenues totaling $1.4 billion and adjusted earnings per share standing at $2.16. Consequently, the company has increased its full-year adjusted EPS forecast to a range of $7.15 to $7.45. Despite facing challenges in the European markets, particularly Germany and Italy, Terex maintains a strong balance sheet and reaffirms its 2024 free cash flow outlook of $325 million to $375 million. Full-year sales are projected to be between $5.1 billion and $5.3 billion, with an increased operating margin outlook of 12.9% to 13.2%. These are the recent developments concerning Terex Corporation.
InvestingPro Insights
As Terex Corporation (NYSE:TEX) embarks on this significant financial move to fund its acquisition and expand its credit facilities, it's worth examining some key financial metrics and insights from InvestingPro.
Terex's current market capitalization stands at $3.53 billion, reflecting its substantial presence in the materials processing and aerial work platforms industry. The company's P/E ratio of 7.15 suggests that it's trading at a relatively low earnings multiple, which aligns with an InvestingPro Tip indicating that Terex is "Trading at a low P/E ratio relative to near-term earnings growth." This could be particularly relevant as the company seeks to expand through acquisition.
Another InvestingPro Tip highlights that Terex "Operates with a moderate level of debt," which is crucial information given the company's plans to issue $750 million in senior notes and potentially incur up to $1,250 million in term loans. This moderate debt level may provide Terex with the financial flexibility to pursue its growth strategy without overly straining its balance sheet.
The company's revenue for the last twelve months as of Q2 2024 was $5.19 billion, with a revenue growth of 4.22% over the same period. This growth, coupled with an EBITDA of $685.3 million and an EBITDA growth of 6.0%, indicates that Terex has been expanding its operations profitably, which could support its ambitious financing plans.
For investors interested in a deeper analysis, InvestingPro offers additional tips and insights. There are 11 more InvestingPro Tips available for Terex, providing a comprehensive view of the company's financial health and market position.
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