ESAB (ESAB) director details family partnership stock shifts and preferred share deal
Filing Impact
Filing Sentiment
Form Type
4
Rhea-AI Filing Summary
ESAB Corp director Mitchell P. Rales reported several indirect ownership changes involving family entities and trusts. A family partnership affiliated with him received 3,537,797 shares of common stock through contributions from his adult children, a family trust, and a revocable trust, all for no consideration. The filing also shows custodial and trust accounts holding shares for his daughters, for which he disclaims beneficial ownership. In addition, the family partnership acquired 100,000 shares of 6.50% Series A Mandatory Convertible Preferred Stock in a private placement, which will mandatorily convert into ESAB common shares in roughly three years. The preferred stock carries a $1,000 per-share liquidation preference, pays a 6.50% dividend, and will convert into between 7.1806 and 8.2576 common shares per preferred share, subject to customary anti-dilution adjustments and special terms if a Fundamental Change occurs. The filing highlights estate and ownership structuring moves and a private placement investment, rather than open-market buying or selling.
Positive
- None.
Negative
- None.
Insider Trade Summary
111,346 shares gifted
Mixed
8 txns
Insider
RALES MITCHELL P
Role
null
| Type | Security | Shares | Price | Value |
|---|---|---|---|---|
| Grant/Award | 6.50% Series A Mandatory Convertible Preferred Stock | 100,000 | $1,000.00 | $100.00M |
| Gift | Common Stock, par value $.001 | 111,346 | $0.00 | -- |
| Other | Common Stock, par value $.001 | 70,686 | $0.00 | -- |
| Other | Common Stock, par value $.001 | 3,355,765 | $0.00 | -- |
| holding | Common Stock, par value $.001 | -- | -- | -- |
| holding | Common Stock, par value $.001 | -- | -- | -- |
| holding | Common Stock, par value $.001 | -- | -- | -- |
| holding | Common Stock, par value $.001 | -- | -- | -- |
Holdings After Transaction:
6.50% Series A Mandatory Convertible Preferred Stock — 100,000 shares (Indirect, Through Family Partnership);
Common Stock, par value $.001 — 111,346 shares (Indirect, Through Family Partnership);
Common Stock, par value $.001 — 15,836 shares (Direct, null)
Footnotes (1)
- As of June 1, 2026, a family partnership affiliated with the Reporting Person acquired 3,537,797 shares of Common Stock through the following contributions to the family partnership for no consideration: (i) 111,346 shares were contributed from the Reporting Person's adult children and entities affiliated with the Reporting Person's adult children; (ii) 70,686 shares were contributed from the Mitchell P. Rales Family Trust of which the Reporting Person is trustee; and (iii) 3,355,765 shares were contributed from a revocable trust of which the Reporting Person is the trustee. The family partnership is a limited partnership that holds securities for the benefit of the Reporting Person and his adult children. The family partnership is managed by a general partner, which is a limited liability company that is indirectly controlled by the Reporting Person. The Reporting Person disclaims beneficial ownership of the shares held by the family partnership except to the extent of his pecuniary interest therein. The reported shares are held through custodial accounts for the benefit of the Reporting Person's daughters. The Reporting Person disclaims beneficial ownership of the shares held by his daughters, and this report should not be deemed an admission that the Reporting Person is the beneficial owner of his daughters' shares for purposes of Section 16 or for any other purpose. The reporting person is a trustee of the Mitchell P. Rales Family Trust. On June 1,2026, the family partnership acquired 100,000 shares of the Company's 6.50% Series A Mandatory Convertible Preferred Stock ("Preferred Stock") in a private placement. The Preferred Stock does not have a maturity date but will mandatorily convert into shares of the Company's Common Stock on the mandatory conversion date, approximately three years after the initial issue date. Each share of the Preferred Stock has a liquidation preference of $1,000 per share, plus accumulated but unpaid dividends, and will automatically convert on the mandatory conversion date into between 7.1806 shares (the "Minimum Conversion Rate") and 8.2576 shares (the "Maximum Conversion Rate") of the Company's Common Stock per share, depending on the Applicable Market Value of the common stock during the Settlement Period (each as defined in the Certificate of Designations for the Preferred Stock) [cont.] [cont.] The conversion rates will be subject to certain customary anti-dilution adjustments. Prior to the mandatory conversion date, holders may elect to convert at any time at the Minimum Conversion Rate, subject to adjustment for any accumulated and unpaid dividends that have not been declared. The Preferred Stock may not be redeemed by the Company (other than in limited circumstances relating to HSR Act compliance). If a "Fundamental Change" occurs, holders will have the right to convert at an increased Fundamental Change Conversion Rate and to receive a Fundamental Change Dividend Make-whole Amount (each as defined in the Certificate of Designation) equal to the present value of all remaining scheduled dividend payments, discounted at 6.50% per annum.
Key Figures
Common shares to family partnership: 3,537,797 shares
Gifted common shares: 111,346 shares
Preferred shares acquired: 100,000 shares
+5 more
8 metrics
Common shares to family partnership
3,537,797 shares
Contributions to family partnership as of June 1, 2026
Gifted common shares
111,346 shares
Bona fide gift contributing to family partnership holdings
Preferred shares acquired
100,000 shares
6.50% Series A Mandatory Convertible Preferred Stock, private placement
Preferred liquidation preference
$1,000 per share
6.50% Series A Mandatory Convertible Preferred Stock terms
Minimum conversion rate
7.1806 common shares/share
Mandatory conversion of preferred into ESAB common stock
Maximum conversion rate
8.2576 common shares/share
Mandatory conversion of preferred into ESAB common stock
Underlying common on preferred
718,060 shares
Underlying ESAB common stock referenced for preferred position
Reported direct holding
15,836 shares
Common stock held directly following reported changes
Key Terms
6.50% Series A Mandatory Convertible Preferred Stock, bona fide gift, liquidation preference, anti-dilution adjustments, +2 more
6 terms
6.50% Series A Mandatory Convertible Preferred Stock financial
"On June 1,2026, the family partnership acquired 100,000 shares of the Company's 6.50% Series A Mandatory Convertible Preferred Stock"
bona fide gift financial
"transaction_code_description": "Bona fide gift""
A bona fide gift is a genuine, voluntary transfer of money, property, or benefits from one party to another made without expectation of repayment, services, or hidden conditions. Investors care because such gifts can affect company disclosures, related‑party transaction rules, tax treatment, and perceived conflicts of interest; think of it like someone giving you a present with no strings attached — but on a corporate scale, auditors and regulators need to verify it really is unconditional.
liquidation preference financial
"Each share of the Preferred Stock has a liquidation preference of $1,000 per share"
A liquidation preference is a rule that determines who gets paid first and how much they receive when a company is sold, goes bankrupt, or distributes its assets. It gives certain investors a priority claim—often returning their original investment plus any agreed multiple—before other owners receive money, which shapes how much common shareholders and founders ultimately get; think of it as a front-of-the-line pass that affects payout order and investor returns.
anti-dilution adjustments financial
"The conversion rates will be subject to certain customary anti-dilution adjustments."
Anti-dilution adjustments are changes made to the ownership stakes or value of an investment to protect investors from having their shares become less valuable if the company issues new shares at a lower price. Imagine buying a piece of a pie, and then the pie is cut into more slices without increasing in size—these adjustments help ensure your slice still retains its worth. They matter to investors because they help preserve the value of their investment when the company’s share price drops.
Fundamental Change financial
"If a "Fundamental Change" occurs, holders will have the right to convert at an increased Fundamental Change Conversion Rate"
A fundamental change is a major shift in how a company or economy operates, like a new technology or a big change in leadership. It matters because such changes can affect the value or stability of investments, making them more or less attractive. Think of it like a major upgrade or shift in the rules of a game that can change the outcome.
Fundamental Change Dividend Make-whole Amount financial
"and to receive a Fundamental Change Dividend Make-whole Amount equal to the present value of all remaining scheduled dividend payments"
FAQ
What did ESAB (ESAB) director Mitchell Rales report in this Form 4?
The Form 4 reports indirect ownership changes via family entities and trusts, plus a private placement purchase of preferred stock by a family partnership. It reflects estate and ownership structuring, not open-market buying or selling of ESAB common shares.
What preferred stock did the family partnership acquire in ESAB (ESAB)?
The family partnership acquired 100,000 shares of ESAB’s 6.50% Series A Mandatory Convertible Preferred Stock in a private placement. Each share has a $1,000 liquidation preference and will mandatorily convert into ESAB common stock after roughly three years, subject to stated terms.
What is the conversion rate of ESAB’s 6.50% Series A Mandatory Convertible Preferred Stock?
Each preferred share will automatically convert into between 7.1806 and 8.2576 ESAB common shares, depending on the Applicable Market Value during the Settlement Period. Holders can also elect to convert earlier at the minimum rate, subject to dividend-related adjustments.
What does the bona fide gift in the ESAB (ESAB) Form 4 represent?
The Form 4 reports a bona fide gift of 111,346 ESAB common shares linked to contributions into a family partnership. The gift is part of broader transfers among family-related entities and does not represent an open-market sale of ESAB stock by the director.