Valvoline Inc. Announces Expiration and Results of Cash Tender Offer for Any and All of Its Outstanding 4.250% Senior Notes Due 2030
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Valvoline Inc.'s tender offer, which nearly encompasses the entirety of the outstanding 4.250% senior notes due 2030, is a significant financial maneuver that merits a closer look. With a 99.72% submission rate, the cash tender offer reflects a strong bondholder response, indicative of the market's reception to the company's creditworthiness and strategic financial management.
The offer, serving to address the asset sale covenant, also highlights the potential reshaping of Valvoline's debt profile. This action can be seen as an endeavor to optimize capital structure, potentially reducing interest expenses or clearing the path for new financial activities. Investors should examine the implications of such debt restructuring on the company's leverage ratios and interest coverage metrics, which could signal a shift in financial strategy that may impact future investment considerations.
The near-total participation in Valvoline's tender offer reflects bondholder confidence in receiving the tender consideration versus holding the notes to maturity. This transaction creates liquidity for note holders, which is an attractive proposition in a potentially fluctuating interest rate environment.
Moreover, the repurchase of debt could suggest Valvoline's proactive stance on deleveraging or refinancing to take advantage of prevailing interest rates. Market participants may interpret this as a positive signal regarding Valvoline's operational cash flows and its ability to meet its financial obligations. It's also worth noting that engagement of top-tier financial institutions as dealer managers could reassure stakeholders of the offer's legitimacy and Valvoline's market standing.
The results of the tender offer could be read as a strategic move by Valvoline to simplify its capital structure ahead of potential strategic endeavors, possibly including mergers, acquisitions, or investments in new technology. By retiring the notes due in 2030, the company may be aiming to free up capital or reduce long-term liabilities, enhancing financial flexibility and possibly improving key financial ratios such as debt-to-equity and return on capital.
Stakeholders should consider the impact of these changes on the company's ability to react to market opportunities or withstand economic downturns. Additionally, the smooth execution of such financial operations often reflects positively on a company's management and governance practices, which can be influential on market sentiment and the company's stock performance.
The terms and conditions of the Tender Offer are described in an Offer to Purchase, dated March 14, 2024 (the "Offer to Purchase").
CUSIP/ISIN(1) | Title of | Outstanding | Aggregate | Percent of | Consideration(2)(3) |
92047W AD3 /
U92147 AB0 / |
| 99.72 % | |||
(1) | CUSIPs/ISINs are provided for the convenience of holders. No representation is made as to the | ||||
(2) | Per | ||||
(3) | Does not include accrued and unpaid interest from the last date on which interest has been paid | ||||
No tenders submitted after the Expiration Time will be valid. Subject to the terms and conditions of the Tender Offer, holders that validly tendered their Notes and did not validly withdraw such Notes at or prior to the Expiration Time and whose Notes are accepted for purchase pursuant to the Tender Offer are eligible to receive the consideration as set forth in the table above. In addition, holders whose Notes are accepted for purchase will receive accrued and unpaid interest on such Notes from the last date on which interest has been paid to, but excluding, the Settlement Date. Any Notes validly tendered at or prior to the Expiration Time that were not validly withdrawn at or prior to the Expiration Time may not be withdrawn thereafter, except as required by law.
Valvoline expects to accept for purchase all of the Tendered Notes. The Settlement Date for the Tendered Notes is expected to be April 16, 2024.
The consummation of the Tender Offer is subject to, and conditioned upon, the satisfaction or waiver of certain conditions described in the Offer to Purchase.
This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any security. No offer, solicitation, or sale was made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.
Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC are the dealer managers in the Tender Offer. Global Bondholder Services Corporation has been retained to serve as both the depositary and the information agent (the "Depositary and Information Agent") for the Tender Offer. Questions regarding the Tender Offer should be directed to Citigroup Global Markets Inc. at (800) 558-3745 (toll-free) or (212) 723-6106 (collect), Morgan Stanley & Co. LLC at (800) 624-1808 (toll-free) or (212) 761-1057 (collect) and Goldman Sachs & Co. LLC at (800) 828-3182 (toll-free) or (212) 902-5962 (collect). Requests for copies of the Offer to Purchase and other related materials should be directed to Global Bondholder Services Corporation at (855) 654-2015 (toll free) or (212) 430-3774 by e-mail at contact@gbsc-usa.com.
About Valvoline Inc.
Valvoline Inc. (NYSE: VVV) is the quick, easy, trusted leader in automotive preventive maintenance. Valvoline Inc. is creating shareholder value by driving the full potential in our core business, accelerating network growth and innovating to meet the needs of customers and the evolving car parc. With approximately 1,900 service centers throughout
* Based on a survey of more than 900,000 Valvoline Instant Oil Change℠ customers annually
™ Trademark, Valvoline Inc., or its subsidiaries, registered in various countries
SM Service mark, Valvoline Inc., or its subsidiaries, registered in various countries
Forward-Looking Statements
Certain statements in this press release, other than statements of historical fact, are forward-looking statements. Such forward-looking statements may include, without limitation, statements about the Tender Offer, the Settlement Date, our expectation to accept for purchase all of the Tendered Notes and whether we actually consummate the Tender Offer as planned or at all. Valvoline has identified some of these forward-looking statements with words such as "anticipates," "believes," "expects," "estimates," "is likely," "predicts," "projects," "forecasts," "may," "will," "should," and "intends," and the negative of these words or other comparable terminology. These forward-looking statements are based on Valvoline's current expectations, estimates, projections, and assumptions as of the date such statements are made and are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. Additional information regarding these risks and uncertainties are described in Valvoline's filings with the Securities and Exchange Commission (the "SEC"), including in the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Quantitative and Qualitative Disclosures about Market Risk" sections of Valvoline's most recently filed periodic reports on Forms 10-K and 10-Q, which are available on Valvoline's website at http://investors.valvoline.com/sec-filings or on the SEC's website at http://www.sec.gov. Valvoline assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future, unless required by law.
For Further Information
Investor Inquiries
Elizabeth B. Russell
+1 (859) 357-3155
IR@valvoline.com
Media Inquiries
Angela Davied
media@valvoline.com
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SOURCE Valvoline Inc.
