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Stanley Black (SWK) Prices 6.75-Million Equity Units Offering

Stanley Black & Decker, Inc. SWK yesterday announced the pricing of 6.75 million equity units offering. The offering, made under the company’s SEC-filed existing shelf registration statement, is expected to close on Nov 13, 2019.

As noted, it gave underwriters an option to purchase up to 750,000 equity units in excess of 6.75 million units offered. The option will help the company cover over-allotments.

Talking about the units, the company communicated that equity units will comprise 0.675 million of 0% Series D Cumulative Perpetual Convertible Preferred Stock (liquidation preference being $675 million). Also, the equity units will include purchase contracts for Stanley Black’s common shares. Each convertible preferred stock can be converted to 5.2263 common shares of the company on and prior to November 2022. The initial conversion price is $191.34 per share.

Stanley Black noted that it expects to receive $675 million in gross proceeds from the equity units offering. After payment of offering expenses as well as commissions and discounts to underwriters, the company can use the proceeds as well as available cash for the redemption of its 5.75% Junior Subordinated Debentures (to mature in 2052). Additionally, it may use the funds for purchasing common stock options from counterparties.

Notably, Stanley Black had long-term debts of $3,908.8 million at the end of third-quarter 2019. The company’s weighted-average common shares outstanding (diluted) in the third quarter were 150.6 million.

Zacks Rank and Stocks to Consider

With a market capitalization of $24.2 billion, Stanley Black currently carries a Zacks Rank #3 (Hold). In the past 30 days, the Zacks Consensus Estimate for its earnings has declined 1.6% to $8.42 for 2019 and decreased 3.2% to $9.04 for 2020.

Stanley Black & Decker, Inc. Price and Consensus


Stanley Black & Decker, Inc. price-consensus-chart | Stanley Black & Decker, Inc. Quote

The company’s share price has increased 16.2% in the past three months compared with the industry’s growth of 15.4%.

Some better-ranked stocks in the industry are Tennant Company TNC, Dover Corporation DOV and Lakeland Industries, Inc. LAKE. While Tennant currently sports a Zacks Rank #1 (Strong Buy), Dover and Lakeland carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, earnings estimates for these companies improved for the current year. Further, positive earnings surprises for the last reported quarter were 40% for Tennant, 4.58% for Dover and 1,600% for Lakeland.

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