Core & Main Announces Secondary Offering and Share Repurchase
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The secondary public offering of shares by Core & Main Inc.'s selling stockholders represents a pivotal event for the company's equity structure. A large offering, such as the 19.8 million shares indicated, can signal various things to the market. For instance, it could imply that early investors are looking to liquidate part of their holdings, often after a period of lock-up following an initial public offering. This can sometimes be interpreted by the market as a lack of confidence by insiders if the company's future prospects.
However, it's important to note that Core & Main is not issuing new shares and therefore, the offering will not dilute the current shareholders' stakes. The absence of dilution can be viewed positively by the market. Additionally, the repurchase of shares and partnership interests concurrent with the offering suggests a strategic move by Core & Main to consolidate ownership and possibly provide a signal of confidence in the company's valuation, which could be reassuring for investors.
From a market dynamics perspective, the underwriters' ability to sell shares at market or negotiated prices provides flexibility and could help in managing the market impact. The effectiveness of the shelf registration statement allows for a quicker response to market conditions, which is crucial for the success of such an offering.
The financial implications of the secondary public offering and the subsequent share repurchase by Core & Main need to be analyzed carefully. The repurchase of shares at the same price paid to the underwriters indicates a neutral cash flow event for the company, since it's not receiving proceeds from the offering. However, the move could have implications for the company's balance sheet, depending on how the repurchase is financed.
If Core & Main uses existing cash reserves for the repurchase, it could lead to a decrease in cash on hand, which might affect the company's liquidity. Alternatively, if the repurchase is financed through debt, it could increase the company's leverage, impacting its debt-to-equity ratio and potentially its credit rating.
Investors should also consider the timing and the price at which the offering and repurchase are being executed. If the transaction occurs at a price perceived to be below the company's intrinsic value, it could be beneficial for the remaining shareholders. Conversely, if the market interprets the offering as a sign that the stock is overvalued, it could put downward pressure on the stock price.
In the context of a secondary public offering, legal compliance and the accuracy of disclosures are paramount. The mention of a shelf registration statement being effective is a critical component. This means that Core & Main has previously filed the necessary documentation with the SEC, which allows them to issue securities to the public more quickly and with fewer regulatory hurdles at the time of the offering.
Interested parties are encouraged to read the shelf registration statement and other related SEC filings to understand the terms of the offering, the risks involved and the company's financial health. This level of transparency is required by securities law to ensure that all investors have access to the same information when making investment decisions.
It's also important to note that the underwriters, J.P. Morgan and Citigroup, have a significant role in ensuring compliance with securities laws and in the successful placement of the offering. Their reputation and expertise in managing such transactions are crucial in maintaining investor confidence throughout the process.
In addition, Core & Main announced that concurrent with the completion of the offering, it expects to repurchase and redeem, as the case may be, from the selling stockholders 3.13 million shares of its Class A common stock and 1.87 million partnership interests of the Company’s subsidiary Core & Main Holdings, LP (together with a corresponding number of shares of Class B common stock of Core & Main) at the same per share price to be paid by the underwriters to the selling stockholders in the offering. The closing of the repurchase is subject to the closing of the offering. The closing of the offering is not conditioned upon the closing of the repurchase.
J.P. Morgan and Citigroup are acting as the joint lead book-running managers for the offering. The underwriters may offer the shares of Class A common stock from time to time for sale in one or more transactions on the NYSE, in the over-the-counter market, through negotiated transactions or otherwise, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices.
A shelf registration statement (including a prospectus) relating to these securities has been filed with the SEC and is effective. Before investing, interested parties should read the shelf registration statement and other documents filed with the SEC for information about Core & Main and this offering. You may get these documents for free by visiting EDGAR on the SEC website at sec.gov. Alternatively, a copy may be obtained from J.P. Morgan, c/o Broadridge Financial Solutions, 1155 Long Island Avenue,
This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended.
About Core & Main
Based in
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that constitute “forward-looking statements,” including with respect to the proposed offering and repurchase. No assurance can be given that the offering discussed above will be completed on the terms described, or at all. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of Core & Main, including those set forth in the Risk Factors section of the registration statement for the offering and the preliminary prospectus supplement included therein, as filed with the SEC. Copies are available on the SEC’s website at www.sec.gov.
Core & Main undertakes no obligation to update these statements for revisions or changes after the date of this press release, except as required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240122083810/en/
Investor Relations:
Robyn Bradbury, 314-995-9116
InvestorRelations@CoreandMain.com
Source: Core & Main, Inc.
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