Terex Corporation Announces Launch of Private Offering of $750 Million of Senior Notes Due 2032

Rhea-AI Summary

Terex (NYSE:TEX) has announced its intention to offer $750 million in senior notes due 2032 through a private offering exempt from SEC registration. The proceeds, along with new term loan borrowings and cash on hand, will be used to finance Terex's acquisition of Dover 's Environmental Solutions Group (ESG) and related expenses.

Concurrently, Terex is seeking to amend its existing credit agreement to increase its revolving credit facilities to $800 million from $600 million and extend their maturity. Additionally, Terex plans to establish a new term loan facility for up to $1,250 million. The notes will be offered only to qualified institutional buyers and certain non-U.S. persons, and will not be registered under the Securities Act.

Positive

• Terex is raising $750 million through senior notes offering
• Revolving credit facilities to be increased to $800 million from $600 million
• New term loan facility of up to $1,250 million to be established
• Funds will be used to finance the acquisition of Dover's Environmental Solutions Group

Negative

• Potential increase in debt load with $750 million notes offering and $1,250 million term loan
• Possible shareholder dilution if additional shares are issued to fund the acquisition

Insights

Financial Analyst

This announcement of a $750 million senior notes offering by Terex is significant for investors. The company is leveraging debt financing to fund its acquisition of Dover's Environmental Solutions Group, which could be a strategic move to expand its portfolio. The combined use of senior notes, term loans and cash on hand indicates a complex financing structure for the acquisition.

The increase in revolving credit facilities from $600 million to $800 million and the addition of a new $1.25 billion term loan facility suggest Terex is significantly expanding its debt capacity. This could provide more financial flexibility but also increases the company's leverage and financial risk. Investors should closely monitor how this additional debt affects Terex's balance sheet and future cash flows.

The private nature of the offering and the targeting of qualified institutional buyers indicate a sophisticated financial strategy. However, the success of this move will largely depend on the synergies and value creation from the ESG acquisition, as well as Terex's ability to manage the increased debt load effectively.

Legal Expert

The private offering structure of this debt issuance is noteworthy from a legal perspective. By relying on Rule 144A and Regulation S of the Securities Act, Terex is bypassing the more rigorous public registration process. This approach offers greater speed and flexibility but limits the potential investor base to qualified institutional buyers and certain non-U.S. persons.

The explicit statement that the notes are not registered under the Securities Act is a important legal disclaimer, protecting Terex from potential regulatory issues. The company's careful language around the offering being subject to "market and other conditions" provides legal flexibility if the offering doesn't proceed as planned.

Investors should be aware that these unregistered securities have transferability and liquidity compared to publicly registered offerings. The success of the credit agreement amendment is also a key legal consideration, as it's integral to the overall financing strategy for the acquisition.

NORWALK, Conn., Sept. 30, 2024 /PRNewswire/ -- Terex Corporation ("Terex") (NYSE:TEX) today announced that it intends to offer, subject to market and other conditions, $750 million in aggregate principal amount of senior notes due 2032 (the "Notes") in a private offering (the "Private Offering") that is exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act").

Terex intends to use the proceeds from the Private Offering, together with the new term loan borrowings described below and cash on hand, to consummate Terex's previously announced acquisition (the "Acquisition") of the subsidiaries and assets of Dover Corporation ("Dover") that constitute Dover's Environmental Solutions Group ("ESG"), and to pay related fees, costs and expenses.

The Notes and the related guarantees will be offered and sold only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act and to certain non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act. The Notes and the related guarantees have not been, and will not be, registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and the rules promulgated thereunder.

Concurrently with the Private Offering, Terex is also seeking to amend (the "Amendment") its existing credit agreement (i) to increase the size of its revolving credit facilities to $800 million from $600 million and to extend the maturity of its revolving credit facilities to the fifth anniversary of the closing of the Acquisition and (ii) to provide for a new term loan facility which will mature on the seventh anniversary of the closing of the Acquisition and pursuant to which Terex expects to incur term loans in an aggregate amount of up to $1,250 million. There can be no assurance that Terex will be able to complete the Private Offering or the Amendment on terms and conditions favorable to it or at all.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes or the related guarantees in any jurisdiction.

Forward Looking Statements:

This press release contains forward-looking information (within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995) regarding future events or Terex's future financial performance that involve certain contingencies and uncertainties. In addition, when included in this press release, the words "may," "expects," "should," "intends," "anticipates," "believes," "plans," "projects," "estimates," "will" and the negatives thereof and analogous or similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statement is not forward-looking. Terex has based these forward-looking statements on current expectations and projections about future events. These statements are not guarantees of future performance. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements.

Because forward-looking statements involve risks and uncertainties, actual results could differ materially from those risks reflected in such forward-looking statements. Such risks and uncertainties, many of which are beyond the control of Terex, include, among others, (1) the consummation and the timing of the Private Offering and the Amendment, (2) the consummation of the Acquisition and (3) those risks and uncertainties described under the caption "Risk Factors" in Terex's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (the "SEC") on February 9, 2024, Terex's Quarterly Report on Form 10-Q for the quarterly period June 30, 2024 filed with the SEC on July 31, 2024 and the risk factors included in Exhibit 99.2 to Terex's Current Report on Form 8-K filed with the SEC on September 30, 2024.

Actual events or the actual future results of Terex may differ materially from any forward-looking statement due to these and other risks, uncertainties and material factors. The forward-looking statements speak only as of the date of this release. Terex expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement included in this release to reflect any changes in expectations with regard thereto or any changes in events, conditions, or circumstances on which any such statement is based.

About Terex:

Terex is a global manufacturer of materials processing machinery and aerial work platforms. We design, build and support products used in maintenance, manufacturing, energy, recycling, minerals and materials management, and construction applications. Certain Terex products and solutions enable customers to reduce their impact on the environment including electric and hybrid offerings that deliver quiet and emission-free performance, products that support renewable energy, and products that aid in the recovery of useful materials from various types of waste. Our products are manufactured in North America, Europe, Australia and Asia and sold worldwide. We engage with customers through all stages of the product life cycle, from initial specification to parts and service support. We report our business in the following segments: (i) Materials Processing and (ii) Aerial Work Platforms.

Contact Information:
Derek Everitt
VP Investor Relations
Email: InvestorRelations@Terex.com

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SOURCE Terex Corporation

FAQ

What is the purpose of Terex 's $750 million senior notes offering?

Terex (NYSE:TEX) is offering $750 million in senior notes due 2032 to finance its acquisition of Dover 's Environmental Solutions Group (ESG) and pay related fees, costs, and expenses.

How is Terex (TEX) planning to amend its existing credit agreement?

Terex is seeking to increase its revolving credit facilities to $800 million from $600 million, extend their maturity, and establish a new term loan facility for up to $1,250 million.

Who can purchase the senior notes offered by Terex (TEX)?

The senior notes are being offered only to qualified institutional buyers under Rule 144A and certain non-U.S. persons in transactions outside the United States under Regulation S of the Securities Act.

Will Terex 's (TEX) senior notes be registered under the Securities Act?

No, the senior notes and related guarantees will not be registered under the Securities Act or any state securities laws, and may not be offered or sold in the United States without registration or an applicable exemption.