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3D Systems (DDD) Reveals Pricing of Upsized Notes Offering

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  • DDD
  • CLR
  • TMO
  • APTV

3D Systems DDD on Thursday revealed that it has increased the amount of the previously announced senior notes offering and set the pricing of the same. This global leader in additive manufacturing solutions has now offered 0% convertible senior notes worth $400 million, up from the earlier proposal of $350 million.

The notes will be issued to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933. 3D Systems management stated that the offering will be closed on Nov 16, 2021, while the notes will mature on Nov 15, 2026.

Buyers will get an option to buy an additional $60 million aggregate principal amount of 0% convertible senior notes, instead of the previous option of $52.5 million. Purchasers can exercise this option within 13 days from the date on which the notes are first issued.

These notes will be an unsecured senior liability of 3D Systems and can be converted into cash and shares of 3D Systems’ common stock or a combination of both at the discretion of the owners of the notes and the company.

For stock conversion, 3D Systems has fixed the conversion rate at 27.8364 shares per $1,000 principal amount of senior notes. This is equivalent to $35.92 per share, which signifies a premium of approximately 42.5% from the stock’s closing price of $25.21 as of Nov 11.

3D Systems projects the offering to generate net proceeds of approximately $388 million ($446 million if the additional purchase option exercised) after deducting for commission, discounts and offering-related expenses. The 3D printer maker intends to use the net proceeds for general corporate purposes, including strategic transactions, investments and acquisitions.

We believe that the latest offering will boost 3D Systems’ financial flexibility and help meet its financial obligations. Moreover, it will provide ample scope to deploy capital for long-term growth opportunities and reward stockholders.

As of Sep 30, 2021, 3D Systems had cash and cash equivalents of $503 million, no debt obligations and an unused revolving credit facility worth $100 million with full availability. A huge cash balance and the latest proposed senior notes offerings will provide DDD ample liquidity and financial strength to survive amid the COVID-19 crisis and continue investing in strategic growth initiatives.

Shares of 3D Systems have outperformed the Zacks Computer – Mini Computer industry. Year to date, the stock has rallied 140.5% while the Zacks Computer – Mini Computer industry has gained 12.7%.

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Zacks Investment Research

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Borrowing costs continue to be low, enabling companies to obtain easy financing. With the U.S. treasuries offering low rates, corporate bonds and borrowings from banks are now witnessing high demand.

Last week, Aptiv PLC APTV issued $1.5 billion worth of 3.1% senior notes maturing in 2051. The notes have been issued at 97.814% of its principal amount.

On Nov 9, Continental Resources CLR announced the pricing of its private placement of $1.6 billion of senior notes. The notes have been issued in two tranches having different maturities and different interest rates.

Further, Continental Resources priced notes worth $800 million, having an annualized interest rate of 2.268% and maturity in 2026. Also, senior notes worth $800 million, carrying an annualized interest rate of 2.875%, will mature in 2032.

On the same day, Thermo Fisher Scientific TMO priced its offering of €2.8 billion aggregate principal amount of Euro denominated senior notes.

3D Systems has a Zacks Rank 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Continental Resources and Thermo Fisher Scientific carry a Zacks Rank #2 (Buy) each.

Year-to-date shares of Continental Resources, Thermo Fisher Scientific and Aptiv have rallied 193.3%, 35.5% and 29.7%, respectively.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report

3D Systems Corporation (DDD) : Free Stock Analysis Report

Continental Resources, Inc. (CLR) : Free Stock Analysis Report

Aptiv PLC (APTV) : Free Stock Analysis Report

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