Stanley Black & Decker, Inc. (NYSE: SWK) (the “Company”) today announced the pricing of 750,000 shares of its Series D Cumulative Perpetual Convertible Preferred Stock, with no par value and the liquidation preference fixed at $1,000 per share (the “Convertible Preferred Stock”), originally issued on November 13, 2019 as part of the Company’s corporate units (the “Corporate Units”). The remarketing is expected to settle on November 15, 2022, subject to customary closing conditions.
Prior to the remarketing, the Convertible Preferred Stock (i) did not bear any dividends; (ii) was convertible only upon the occurrence of certain fundamental change events, and, subject to adjustment, the initial conversion rate was 5.2263 shares of the Company’s common stock per share, which was equivalent to a conversion price of approximately $191.34 per share of the Company’s common stock; and (iii) was redeemable from and after December 22, 2022, at a redemption price equal to 100% of the liquidation preference thereof, plus any accumulated and unpaid dividends.
Following the settlement of the remarketing, holders of the Convertible Preferred Stock will be entitled to receive when, as and if declared by the Company’s board of directors, cumulative dividends, solely in cash, quarterly in arrears at a fixed rate equal to (i) 7.50% per annum of the $1,000 per share liquidation preference (equivalent to $75.00 per annum per share) for dividend periods from, and including, November 15, 2022 to, but excluding, December 22, 2022 (the “dividend step-up date”), and (ii) 9.00% per annum of the $1,000 per share liquidation preference (equivalent to $90.00 per annum per share) for dividend periods from, and including, the dividend step-up date. In addition, following the settlement of the remarketing, the earliest redemption date applicable to the Convertible Preferred Stock will remain December 22, 2022 and the Convertible Preferred Stock will have an initial conversion rate of 5.2263 shares of the Company’s common stock per share of the Convertible Preferred Stock, which is equivalent to an initial conversion price of approximately $191.34, subject to adjustment. Holders of shares of the Convertible Preferred Stock will have a right to convert their shares at their option, at any time and from time to time, into, at the Company’s election, cash, shares of the Company’s common stock or a combination thereof, unless the Company has previously irrevocably elected a settlement payment method to apply. The other terms of the Convertible Preferred Stock will not change in connection with the remarketing. The Company intends to redeem for cash all outstanding shares of the Convertible Preferred Stock on December 22, 2022, subject to the closing of the remarketing, approval by the board of directors and customary legal requirements.
Citigroup Global Markets Inc. (“Citigroup”) is acting as remarketing agent in the remarketing.
The proceeds of the remarketing of the Convertible Preferred Stock will be $750 million, before expenses and a remarketing fee payable to the remarketing agent, and will provide to the holders of the Corporate Units the consideration necessary to satisfy their obligations under the related purchase contracts. The purchase contracts obligate the holders of Corporate Units to purchase shares of the Company’s common stock on November 15, 2022 for $750 million in the aggregate, and the Convertible Preferred Stock is pledged to secure the purchase contract obligations of such holders.
This filing does not constitute an offer to sell, or a solicitation of an offer to buy the securities described herein. The remarketing has not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and is being conducted pursuant to an exemption from such registration requirements. Any shares of Convertible Preferred Stock subject to the remarketing may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from such registration requirements.
