APi Group Announces Pricing of Upsized Secondary Public Offering of Common Stock
APi Group Corporation (APG) announced the upsize and pricing of a public offering of 10,569,106 shares of common stock by Blackstone Inc. and Viking Global Investors LP at $34.25 per share. The Selling Stockholders received shares upon conversion of Series B Preferred Shares. APi will not receive proceeds from the offering.
Negative
The offering may dilute existing shareholders' ownership as a significant number of shares are being sold by Selling Stockholders, not the company itself.
The announcement by APi Group Corporation regarding the upsizing and pricing of a significant public offering of shares by major stakeholders is a substantial event for current and potential investors. The sale of over 10 million shares at $34.25 each represents a considerable liquidity event for the Selling Stockholders. A critical factor here is the conversion of Series B Preferred Shares to common stock, which suggests a strategic move by the Selling Stockholders to capitalize on their investment. This can be seen as a positive signal that these investors deem the current market price as favorable for selling.
However, it is important to note that APi Group Corporation itself is not issuing new shares nor receiving proceeds from this transaction, which indicates that the company's capital structure and cash reserves will remain unchanged. The market's reaction to such a large offering could be mixed, as it might lead to concerns about dilution of existing shareholders' equity or perceived as a lack of confidence by the Selling Stockholders in the company's future growth prospects.
The underwriters' 30-day option to purchase additional shares adds another layer of potential future dilution but also indicates underwriter confidence in being able to sell the stock. This option could stabilize the stock price post-offering if exercised strategically. Investors should monitor the stock's trading volume and price following the closing of the offering to assess market sentiment.
Understanding the context of APi Group Corporation's industry and the company's position within it is essential for evaluating the impact of this offering. APi operates in the industrials sector, providing a range of services and solutions. The timing of the offering and the pricing strategy could be influenced by sector performance, overall market conditions and the company's recent financial health. If the industrials sector is experiencing growth, the Selling Stockholders may be leveraging this timing to maximize returns.
Additionally, the decision by major investors like Blackstone and Viking Global to downsize their positions could be interpreted in various ways. It may indicate a strategic portfolio realignment or a shift towards different investment opportunities. The absence of insider selling is typically a reassuring sign to the market, suggesting that the company's leadership remains invested in its future. However, the market will be keen to observe whether this offering leads to increased volatility in APi's stock price or if it's absorbed without significant disruption.
It's also important to consider the broader market implications of such a transaction. If successful, it could potentially encourage other companies with similar capital structures to consider similar liquidity events, especially if the offering is perceived to have been handled effectively and the stock price remains stable or appreciates post-offering.
02/29/2024 - 10:09 PM
NEW BRIGHTON, Minn. --(BUSINESS WIRE)--
APi Group Corporation (NYSE: APG) (“APi” or the “Company”) announced the upsize and pricing of the previously announced underwritten registered public offering of 10,569,106 shares of common stock of the Company commenced by certain funds affiliated with Blackstone Inc. (the “Blackstone Selling Stockholders”) and Viking Global Investors LP (the “Viking Selling Stockholders”), collectively, the “Selling Stockholders,” at a public offering price of $34.25 5.5% Series B Perpetual Convertible Preferred Stock (the “Series B Preferred Shares”).
In connection with the offering, the Selling Stockholders granted the underwriters a 30-day option to purchase up to 1,585,365 additional shares of common stock held by the Selling Stockholders. APi is not selling any shares of common stock and will not receive any proceeds from the sale of the shares of common stock in the offering. The offering is expected to close on or about March 5, 2024, subject to customary closing conditions.
UBS Investment Bank and Citigroup are acting as joint lead book-running managers for the offering. Baird, Barclays, BofA Securities, Jefferies and J.P. Morgan Securities LLC are also acting as joint book-running managers for the offering and Blackstone Securities Partners L.P. and CJS Securities are acting as co-managers for the offering.
A shelf registration statement on Form S-3 relating to the shares of common stock being sold in the offering was filed with the Securities and Exchange Commission (the “SEC”) on January 3, 2022, and declared effective by the SEC on January 7, 2022. The offering of the shares of common stock is being made only by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. A preliminary prospectus describing the terms of the offering has been filed with the SEC and forms a part of the effective shelf registration statement on Form S-3. A copy of the final prospectus related to the offering may be obtained, when filed, on the SEC’s website located at http://www.sec.gov , from UBS Securities LLC at UBS Securities LLC, Attention: Prospectus Department, 1285 Avenue of the Americas , New York, NY 10019, or by email at ol-prospectus-request@ubs.com and from Citigroup at Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 (tel: 800-831-9146).
This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About APi:
APi is a global, market-leading business services provider of life safety, security and specialty services with a substantial recurring revenue base and over 500 locations worldwide. APi provides statutorily mandated and other contracted services to a strong base of long-standing customers across industries. APi has a winning leadership culture driven by entrepreneurial business leaders to deliver innovative solutions for its customers.
Forward-Looking Statements and Disclaimers
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. These statements include, but are not limited to, statements regarding the Selling Stockholders’ public secondary offering of shares of the Company’s common stock, including the expected closing date of the offering. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, market and other general economic conditions and the Selling Stockholders’ and the underwriters’ ability to satisfy the conditions required to close the offering. These forward-looking statements are made as of the date of this press release and, except as required by applicable law, APi assumes no obligation to update such forward-looking statements or to update the reasons why actual results could differ from those projected in such forward-looking statements. Investors should refer to the risk factors set forth in the Registration Statement on Form S-3 filed by APi with the SEC on January 7, 2022, as amended and/or supplemented, and periodic reports and other documents filed by APi with the SEC, including APi’s annual report on Form 10-K for the fiscal ended December 31, 2023.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240229157942/en/
Investor Relations Inquiries:
investorrelations@apigroupinc.us
Source: APi Group Corporation
What is the ticker symbol for APi Group Corporation?
The ticker symbol for APi Group Corporation is APG.
How many shares of common stock were offered in the public offering?
10,569,106 shares of common stock were offered in the public offering.
Who are the Selling Stockholders in the offering?
The Selling Stockholders in the offering are certain funds affiliated with Blackstone Inc. and Viking Global Investors LP.
Will APi Group Corporation receive any proceeds from the sale of shares in the offering?
APi Group Corporation will not receive any proceeds from the sale of shares in the offering.
What was the public offering price per share?
The public offering price per share was $34.25.
