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II-VI Offers $350M Common & $400M Preferred Stocks to Public

II-VI Incorporated IIVI announced the public offerings of $350 million worth common shares and $400 million worth Series A mandatory convertible preferred stock. Also, additional options have been granted to the underwriters.

It is worth mentioning here that the company’s shares declined 2.4% yesterday, ending the trading session at $47.22.

Inside the Headlines

Based on the closing price of $48.39 per share on Jun 29, the company’s common share offering is for 7.2 million shares. Moreover, the preferred stock offerings comprise of 2 million stocks, each with a liquidation preference of $200 per share. It is worth noting here the preferred stocks will be converted into the company’s common shares on Jul 1, 2023.

In addition, II-VI has given underwriters the option to buy additional common stocks worth $52.5 million and Series A mandatory convertible preferred stocks worth $60 million. Notably, the underwriters can purchase the additional common and preferred stocks for the respective prices it is being offered to the public, after adjusting for commissions and discounts. The option for underwriters is valid for 30 days.

II-VI anticipates receiving net proceeds of $714.6 million for the above-mentioned offerings. This along with cash on hand will likely be used by the company for the repayment of borrowings, make investments in growth opportunities and satisfying corporate needs.

It is worth mentioning here that II-VI’s shares outstanding at the end of third-quarter fiscal 2020 (ended March 2020) were 104.3 million. We believe that the above-mentioned common stock offering along with preferred stocks, when converted into common stock, will increase the company’s common stock outstanding balance.

Rise in shares outstanding will likely have adverse impacts on its earnings per share.

Zacks Rank, Price Performance and Estimate Trend

With a market capitalization of $4.4 billion, II-VI currently sports a Zacks Rank #1 (Strong Buy). The company’s share price has increased 86.9% in the past three months compared with the industry’s growth of 30.9%.




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In the past 60 days, the Zacks Consensus Estimate for its earnings has increased 55% to 62 cents per share for the fourth quarter of fiscal 2020 (ended June 2020, results are awaited) and 21.6% to 62 cents for the first quarter of fiscal 2021 (ending September 2020).

IIVI Incorporated Price and Consensus

 

IIVI Incorporated Price and Consensus
IIVI Incorporated Price and Consensus

IIVI Incorporated price-consensus-chart | IIVI Incorporated Quote

Other Stocks to Consider

Three other top-ranked stocks in the Zacks Industrial Products sector are Applied Industrial Technologies, Inc. AIT, Altra Industrial Motion Corp. AIMC and AZZ Inc. AZZ. While Applied Industrial sports a Zacks Rank #1, both Altra Industrial and AZZ 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 Altra Industrial and Applied Industrial have improved for the current year, while that for AZZ remained stable. Further, positive earnings surprise for the last reported quarter was 2.00% for Applied Industrial, 47.73% for Altra Industrial, and 4.44% for AZZ.

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Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
 
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IIVI Incorporated (IIVI) : Free Stock Analysis Report
 
Altra Industrial Motion Corp. (AIMC) : Free Stock Analysis Report
 
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