AZZ Inc. Announces Closing of its Public Offering of Common Stock and Full Exercise of Underwriters' Option

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AZZ Inc. announced the closing of a public offering of 4.6 million shares of common stock, generating gross proceeds of $322 million. The offering included the full exercise of the underwriters' option to buy an additional 600,000 shares. The net proceeds will be used to redeem the Company's 6.0% Series A Convertible Preferred Stock.

Financial Analyst

The public offering of AZZ Inc. represents a notable capital raise for the company, fetching gross proceeds of $322 million. The full exercise of the underwriters' option indicates robust demand for the shares. Proceeds are earmarked for the redemption of preferred stock; this could improve the company's capital structure by reducing more expensive types of capital relative to common equity. However, investors should monitor the dilution effect of the additional shares, which can impact earnings per share. It's also worth noting that the offering price of $70 per share will set a reference for the stock's market value.

Securities Analyst

AZZ Inc.'s decision to redeem its 6.0% Series A Convertible Preferred Stock using the net proceeds indicates a strategic move to streamline its financing strategy. Preferred stock often comes with a higher cost of capital compared to common stock and its redemption could signal confidence in future cash flows and financial stability. Investors should watch for potential impacts on the company's debt-equity ratio and overall cost of capital, both of which are important in assessing the financial health and investment risk of the company.

FORT WORTH, Texas, April 30, 2024 /PRNewswire/ -- AZZ Inc. (NYSE: AZZ), the leading independent provider of hot-dip galvanizing and coil coating solutions, today announced the closing of its underwritten public offering of 4,600,000 shares of common stock, including the full exercise of the underwriters' option to purchase up to 600,000 additional shares of common stock, at a public offering price per share of $70.00, for gross proceeds of $322,000,000, before deducting the underwriting discount and commissions and other offering expenses payable by AZZ.

Evercore ISI and Jefferies acted as joint lead book-running managers. Baird, Wells Fargo Securities and Wolfe | Nomura Alliance acted as additional book-running managers. B. Riley Securities, Roth Capital Partners and Sidoti & Company, LLC acted as co-managers for the offering.

AZZ intends to use the net proceeds for the redemption of all or a portion of the Company's 6.0% Series A Convertible Preferred Stock.

This offering was made pursuant to a shelf registration statement on Form S-3 (File No. 333-276450) filed with the Securities and Exchange Commission (SEC) and declared effective on January 10, 2024. The offering of the shares of common stock has been made by means of a prospectus, including a prospectus supplement, forming a part of the registration statement. A final prospectus supplement and the accompanying prospectus relating to and describing the terms of the offering has been filed with the SEC and is available on the SEC's website at http://www.sec.gov or may be obtained from Evercore Group L.L.C., Attention: Equity Capital Markets, 55 East 52nd Street, 35th Floor, New York, New York 10055, by telephone at 888-474-0200, or by email at ecm.prospectus@evercore.com; or Jefferies LLC, Attn: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, New York 10022, by telephone at (877) 821-7388 or by email at Prospectus_Department@Jefferies.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About AZZ Inc.

AZZ Inc. is the leading independent provider of hot-dip galvanizing and coil coating solutions to a broad range of end-markets. Collectively, our business segments provide sustainable, unmatched metal coating solutions that enhance the longevity and appearance of buildings, products and infrastructure that are essential to everyday life. 

Safe Harbor Statement

Certain statements herein about our expectations of future events or results constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology such as "may," "could," "should," "expects," "plans," "will," "might," "would," "projects," "currently," "intends," "outlook," "forecasts," "targets," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Such forward-looking statements are based on currently available competitive, financial, and economic data and management's views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements. Forward-looking statements speak only as of the date they are made and are subject to risks that could cause them to differ materially from actual results. Certain factors could affect the outcome of the matters described herein. This press release may contain forward-looking statements that involve risks and uncertainties including, but not limited to, changes in customer demand for our products and services, including demand by the construction markets, the industrial markets, and the metal coatings markets. We could also experience additional increases in labor costs, components and raw materials including zinc and natural gas, which are used in our hot-dip galvanizing process; supply-chain vendor delays; customer requested delays of our products or services; delays in additional acquisition opportunities; an increase in our debt leverage and/or interest rates on our debt, of which a significant portion is tied to variable interest rates; availability of experienced management and employees to implement AZZ's growth strategy; a downturn in market conditions in any industry relating to the products we inventory or sell or the services that we provide; economic volatility, including a prolonged economic downturn or macroeconomic conditions such as inflation or changes in the political stability in the United States and other foreign markets in which we operate; acts of war or terrorism inside the United States or abroad; and other changes in economic and financial conditions. AZZ has provided additional information regarding risks associated with the business, including in Part I, Item 1A. Risk Factors, in AZZ's Annual Report on Form 10-K for the fiscal year ended February 29, 2024, and other filings with the SEC, available for viewing on AZZ's website at www.azz.com and on the SEC's website at www.sec.gov. You are urged to consider these factors carefully when evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. These statements are based on information as of the date hereof and AZZ assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Company Contact:
David Nark, Senior Vice President of Marketing and Communications
AZZ Inc.
(817) 810-0095

Investor Contact:
Sandy Martin or Phillip Kupper
Three Part Advisors
(214) 616-2207 or (817) 368-2556

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SOURCE AZZ, Inc.

FAQ

How many shares of common stock were offered by AZZ Inc.?

AZZ Inc. offered 4.6 million shares of common stock in its public offering.

What was the public offering price per share?

The public offering price per share of AZZ Inc. was $70.00.

How much were the gross proceeds generated from the offering?

The offering generated gross proceeds of $322 million for AZZ Inc.

What will AZZ Inc. use the net proceeds for?

AZZ Inc. intends to use the net proceeds to redeem all or a portion of the Company's 6.0% Series A Convertible Preferred Stock.

Who were the lead book-running managers in the offering?

The joint lead book-running managers for the offering were Evercore ISI and Jefferies.