RBC Bearings Incorporated Completes Debt and Equity Offerings for Financing of Pending Dodge Acquisition

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10/07/2021 - 04:10 PM

OXFORD, Conn.--(BUSINESS WIRE)-- RBC Bearings Incorporated (Nasdaq: ROLL), a leading international manufacturer and marketer of highly engineered precision bearings and products for the industrial, defense and aerospace industries, today announced the closings of its previously announced offerings of common stock and mandatory convertible preferred stock on September 24, 2021, and the closing of the offering of $500 million aggregate principal amount of 4.375% senior notes due 2029 by Roller Bearing Company of America, Inc., a wholly-owned subsidiary of RBC Bearings, on October 7, 2021.

In its equity offerings, RBC Bearings issued 3,450,000 shares of common stock (including 450,000 shares sold pursuant to the exercise in full of the option granted to the underwriters of the common stock offering to purchase additional shares) and 4,600,000 shares of 5.00% Series A Mandatory Convertible Preferred Stock (including 600,000 shares sold pursuant to the exercise in full of the option granted to the underwriters of the mandatory convertible preferred stock offering to purchase additional shares solely to cover over-allotments). The common stock and the mandatory convertible preferred stock are listed on the Nasdaq Global Select Market under the ticker symbols “ROLL” and “ROLLP,” respectively.

Net proceeds from the equity offerings and the senior notes offering were approximately $1.5 billion, after deducting underwriting and initial purchaser discounts and offering expenses.

The offerings were completed as part of a series of financing transactions being conducted by RBC Bearings to finance its previously announced pending acquisition of the Dodge Mechanical Power Transmission Business of ABB Asea Brown Boveri Ltd. RBC Bearings is also currently in active negotiations with certain lenders to enter into a new credit agreement providing for a term loan facility in an aggregate amount of $1.3 billion and a revolving facility in an aggregate amount of $500 million. The new term loan and revolving facility have been allocated and the new credit agreement, which is expected to close concurrently with the closing of the Dodge acquisition, is currently in its final stages of negotiations.

RBC Bearings intends to use the net proceeds from these financings to fund a portion of the cash purchase price for the pending acquisition of Dodge, to pay acquisition-related fees and expenses, and for other general corporate purposes.

RBC Bearings and ABB have satisfied all regulatory requirements required to complete the pending acquisition of Dodge. Subject to the satisfaction of customary closing conditions, RBC Bearings and ABB expect to close the acquisition before the end of 2021.

Dr. Michael J. Hartnett, RBC Bearings’ Chairman and Chief Executive Officer, said “We are pleased to announce a smooth completion of the equity and debt offerings portion of our financing for the Dodge acquisition and we anticipate closing in November or December of this year. The combined company will have an attractive position in the Aerospace, Defense and Industrial markets with a diversified client base and expansive geographic footprint. We look forward to the prospect of welcoming DODGE’s talented team to RBC Bearings and executing a successful integration.”

Goldman Sachs & Co. LLC and Wells Fargo Securities, LLC acted as joint lead book-running managers for the offerings of common stock and mandatory convertible preferred stock. BofA Securities, Inc., Citigroup Global Markets Inc. and Truist Securities, Inc. acted as joint book-running managers for the offerings of common stock and mandatory convertible preferred stock and Citizens Capital Markets, Inc., Fifth Third Securities, Inc., KeyBanc Capital Markets Inc., Regions Securities LLC, Morgan Stanley & Co. LLC, Academy Securities, Inc. and William Blair & Company, L.L.C. acted as co-managers for the offerings of common stock and mandatory convertible preferred stock.

Goldman Sachs & Co. LLC acted as lead left book-running manager for the offering of senior notes. Wells Fargo Securities, LLC, BofA Securities, Inc., Citigroup Global Markets Inc., Truist Securities, Inc., Citizens Capital Markets, Inc., Fifth Third Securities, Inc., KeyBanc Capital Markets Inc. and Regions Securities LLC acted as joint book-running managers for the offering of senior notes.

The common stock and mandatory convertible preferred stock were offered by RBC Bearings pursuant to a registration statement (including a prospectus) on Form S-3 that was filed with the Securities and Exchange Commission and became automatically effective on September 20, 2021. Copies of the final prospectus supplements and the accompanying prospectuses relating to the offerings of common stock and mandatory convertible preferred stock were filed with the SEC and may be obtained, along with the registration statement, for free by visiting EDGAR on the SEC’s website at www.sec.gov. You may also send a request for copies of the final prospectus supplements and the accompanying prospectuses to RBC Bearings; Goldman Sachs & Co. LLC, via telephone: (866) 471-2526 or (212) 902-1171, facsimile: (212) 902-9316, email: prospectus-ny@ny.email.gs.com, or standard mail: Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282, Attention: Prospectus Department; or Wells Fargo Securities, LLC, via standard mail: c/o Equity Syndicate Department, 500 West 33rd Street, New York, New York 10001, telephone: (800) 326-5897, or email: cmclientsupport@wellsfargo.com.

The senior notes issued by Roller Bearing Company of America were offered and sold pursuant to a confidential offering memorandum only to “qualified institutional buyers” in the United States pursuant to Rule 144A of the Securities Act of 1933, as amended, and outside the United States to persons other than “U.S. persons” in compliance with Regulation S under the Securities Act.

The senior notes have not been, and will not be, registered under the Securities Act or the securities laws of any state, and may not be offered or sold in the United States or to any U.S. person absent registration under the Securities Act, or pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

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

About RBC Bearings

RBC Bearings Incorporated is an international manufacturer and marketer of highly engineered precision bearings and components. Founded in 1919, the Company is primarily focused on producing highly technical or regulated bearing products and components requiring sophisticated design, testing and manufacturing capabilities for the diversified industrial, aerospace and defense markets. The Company is headquartered in Oxford, Connecticut.

Forward-Looking Statements

This press release includes forward-looking statements, including statements regarding the pending acquisition of Dodge, the new credit agreement and the intended use of the net proceeds from the offerings and the new credit agreement. Forward-looking statements represent RBC Bearings’ current expectations regarding future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements. Among those risks and uncertainties are market conditions, the satisfaction of the closing conditions related to the pending acquisition of Dodge and risks relating to RBC Bearings’ business, including those described in periodic reports that RBC Bearings files from time to time with the SEC. RBC Bearings may not consummate the new credit agreement or the pending acquisition of Dodge described in this press release and cannot provide any assurances regarding its ability to effectively apply the net proceeds as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and RBC Bearings does not undertake to update the statements included in this press release for subsequent developments, except as may be required by law.