AZZ Inc. Announces Pricing of its Public Offering of Common Stock

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AZZ Inc. announces the pricing of its public offering of 4,000,000 shares of common stock at $70.00 per share, totaling $280,000,000 in gross proceeds. The offering grants the underwriters an option to purchase an additional 15% of the shares. The proceeds will be used for redeeming preferred stock and general corporate purposes. The offering is set to close on April 30, 2024.

Positive

• AZZ Inc. announced the pricing of a public offering of 4,000,000 shares of common stock at $70.00 per share.
• The total gross proceeds from the offering amount to $280,000,000.
• The underwriters have been granted an option to purchase up to an additional 15% of the shares offered in the offering.
• The net proceeds from the offering will be used for the redemption of the Company's 6.0% Series A Convertible Preferred Stock and general corporate purposes.
• The offering is expected to close on April 30, 2024.

Negative

• None.

Financial Analyst

The public offering of 4 million shares by AZZ Inc. at $70.00 per share, calculates to significant gross proceeds of $280 million. This capital injection could serve to strengthen the company's balance sheet. One must consider the underwriters' option to purchase an additional 15% of shares, which could potentially enhance the offering's size and impact. Investors should monitor the potential dilutive effect on current shareholders' equity. Also, the intended use of proceeds for redemption of convertible preferred stock could imply a strategic shift to reduce higher-cost capital in favor of equity, potentially altering the capital structure and impacting the firm's cost of capital.

Debt Market Analyst

AZZ's announcement to redeem its 6.0% Series A Convertible Preferred Stock is a notable move within the debt market context. This redemption signals a proactive approach to capital management, possibly indicative of a favorable interest rate forecast or an internal projection of improved financial health. This could, in turn, influence the company's credit rating and borrowing costs. The completion of this offering hinges on market conditions and investor sentiment, with effects that ripple through debt and equity markets alike.

FORT WORTH, Texas, April 25, 2024 /PRNewswire/ -- AZZ Inc. (NYSE: AZZ), the leading independent provider of hot-dip galvanizing and coil coating solutions, today announced the pricing of its underwritten public offering of 4,000,000 shares of common stock at a public offering price per share of $70.00, for gross proceeds of $280,000,000, before deducting the underwriting discount and commissions and other offering expenses payable by AZZ. In connection with the offering, AZZ has granted the underwriters of the offering an option for 30 days to purchase up to an additional 15% of the shares of its common stock sold in the offering. All of the shares in the offering are being offered by AZZ. The offering is expected to close on April 30, 2024, subject to customary closing conditions.

Evercore ISI and Jefferies are acting as joint lead book-running managers. Baird, Wells Fargo Securities and Wolfe | Nomura Alliance are acting as additional book-running managers. B. Riley Securities, Roth Capital Partners and Sidoti & Company, LLC are acting 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, and general corporate purposes.

This offering is being 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 will be 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 will be filed with the SEC, and will be available on the SEC's website at http://www.sec.gov or when available, 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

What is the pricing of AZZ Inc.'s public offering of common stock?

AZZ Inc. priced its public offering of 4,000,000 shares of common stock at $70.00 per share.

How much is the total gross proceeds from AZZ Inc.'s public offering?

The total gross proceeds from AZZ Inc.'s public offering amount to $280,000,000.

What will the underwriters have the option to do in AZZ Inc.'s offering?

The underwriters have been granted an option to purchase up to an additional 15% of the shares offered in AZZ Inc.'s public offering.

What will AZZ Inc. use the net proceeds for?

AZZ Inc. intends to use the net proceeds for the redemption of the Company's 6.0% Series A Convertible Preferred Stock and general corporate purposes.

When is the offering expected to close?

The offering is expected to close on April 30, 2024.