Smith & Wesson to use around $24mn for repurchase outstanding warrant
08 Sep '05
3 min read
Smith & Wesson Holding Corporation, parent company of Smith & Wesson Corp, the legendary 153-year old company in the global business of safety, security, protection and sport, announced that the Company has entered into a definitive agreement with respect to the private placement of 6,000,000 shares of common stock to a group of institutional investors.
The net proceeds to the Company after payment of transaction expenses will be approximately $24.4 million. The Company also issued to the investors warrants to purchase up to an additional 1,200,000 shares of common stock for a period of seven months following effectiveness of the resale registration statement described below. SG Cowen & Co., LLC acted as the exclusive placement agent for the transaction.
The Company intends to use approximately $24.0 million of the proceeds from this private placement for the repurchase of 9,000,000 outstanding warrants. Smith & Wesson's Chief Financial Officer, John Kelly, said, "They view the completion of this accretive private placement as very positive for several reasons. First, the transaction reduces a significant warrant overhang that existed. Second, they view the investment in Company by a group of new institutional investors as a vote of confidence that they are well positioned to achieve strategic goals. Finally, the investment allows us to purchase warrants at a substantial discount to their intrinsic value that, if left outstanding would have consequently diluted our future earnings per share by adding an additional 3,000,000 shares to the number of shares outstanding."
marketing@alchempro.com
