Rollins Inc issues $500 million in senior notes

Rollins Inc (NYSE: NYSE:ROL), a leading company in the services-to-dwellings and other buildings industry with a market capitalization of $24.9 billion, has entered into a significant financial agreement by issuing $500 million in senior unsecured notes, as reported today. According to InvestingPro data, the company maintains a "GREAT" financial health score, operating with moderate debt levels and strong cash flows. The 5.25% Senior Notes, due February 24, 2035, were issued under an indenture with Regions Bank as trustee.

The newly issued notes will rank equally with Rollins’ existing and future senior indebtedness and are guaranteed by the company’s subsidiaries that back its $1.0 billion revolving credit facility. With total debt of $812.53 million and annual revenue of $3.39 billion, Rollins intends to use the net proceeds primarily to repay outstanding borrowings under this credit facility and for other general corporate purposes. InvestingPro analysis reveals that the company’s cash flows sufficiently cover its interest payments, suggesting prudent debt management.

Interest on these notes is payable semiannually at a rate of 5.25% per annum, with the first payment scheduled for August 24, 2025, and the notes reaching maturity on February 24, 2035. Rollins has the option to redeem the notes before November 24, 2034, at a "make-whole" premium or at par thereafter.

The notes are subject to covenants restricting the company’s ability to incur liens, engage in sale/leaseback transactions, or undergo certain mergers and asset transfers, among other limitations. These covenants have several important exceptions detailed in the indenture.

Rollins also entered into a registration rights agreement related to an exchange offer for the notes. The company is committed to filing a registration statement for an exchange offer of freely tradable notes or, if necessary, a shelf registration statement for resales of the notes. If these obligations are not met within specified timeframes, the interest rate on the notes will increase.

The notes were offered to qualified institutional buyers and non-U.S. persons in compliance with applicable securities laws. They were not registered under the Securities Act or state securities laws and are subject to restrictions on resale and transfer.

This financial move, based on a press release statement, reflects Rollins’ strategic financial management and its ongoing efforts to optimize its capital structure. While the stock currently trades near its 52-week high, detailed valuation metrics and 18 additional key insights are available through InvestingPro’s comprehensive research reports, helping investors make informed decisions about this pest control leader’s financial trajectory.

In other recent news, Rollins Inc. reported its fourth-quarter 2024 earnings, with revenue reaching $832 million, surpassing the forecasted $815.99 million, and earnings per share (EPS) of $0.23, meeting analyst expectations. The company achieved a full-year revenue growth of 10.3%, totaling $3.4 billion, and completed 44 acquisition deals, contributing to its expansion strategy. Rollins also announced a private offering of senior notes, intended primarily for debt repayment and general corporate purposes, though the amount and terms of the notes were not disclosed. Jefferies adjusted its financial outlook for Rollins, raising the price target to $48.00 while maintaining a Hold rating, following the company’s solid quarterly performance. The firm noted that Rollins’ revenue exceeded estimates by 2%, though EBITDA fell short by 3% due to increased sales and marketing expenses. Despite these expenses, Rollins maintained robust organic growth, supported by its strategic initiatives and diversified customer acquisition approach. The company’s operating cash flow stood at $688 million, with free cash flow increasing by 15.17%. Analysts from Jefferies highlighted Rollins’ potential for continued growth, emphasizing the productivity of new sales personnel and the company’s strategic approach to mergers and acquisitions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.