DENVER - Gates Industrial (NYSE:GTES) Corporation plc (NYSE: GTES), a global manufacturer of power transmission and fluid power solutions, disclosed the pricing of a secondary offering of 17,500,000 ordinary shares by certain selling stockholders affiliated with Blackstone (NYSE:BX) Inc. The shares are to be offered by the underwriters on the New York Stock Exchange, over-the-counter market, or through negotiated transactions at market prices or at prices related to the market.
The offering, which is expected to close on February 16, 2024, includes a 30-day option for underwriters to purchase up to an additional 2,625,000 shares. Gates will not be offering any shares nor receiving any proceeds from this offering. Leading the management of the offering are Citigroup, Goldman Sachs & Co. LLC, and Jefferies, with several other financial institutions also participating as joint book-running managers.
Concurrently, Gates has announced a share repurchase agreement with Citigroup Global Markets Inc. to buy back $50 million worth of ordinary shares at the same price paid by the underwriters in the secondary offering. This repurchase, amounting to 4,151,100 ordinary shares, will be executed promptly after the offering concludes, contingent upon its closing.
Additionally, certain Gates directors have expressed interest in purchasing approximately 1,050,000 ordinary shares in the offering, although this is not a binding commitment and may result in a lesser number of shares being sold to them.
This news is based on a press release statement from Gates Industrial Corporation plc .
InvestingPro Insights
As Gates Industrial Corporation plc (NYSE: GTES) navigates through its secondary offering and concurrent share repurchase plan, investors are closely monitoring the company's financial health and market performance. According to data from InvestingPro, Gates Industrial has a market capitalization of $3.29 billion, with a P/E ratio that has adjusted to 13.78 over the last twelve months as of Q4 2023. The company's revenue during the same period was reported at $3.57 billion, marking a slight growth of 0.45%.
InvestingPro Tips reveal that Gates management has been actively buying back shares, a move that typically reflects confidence in the company's future prospects. Additionally, the company has been profitable over the last twelve months, which is a positive sign for investors considering the company's financial stability. However, it's worth noting that three analysts have revised their earnings expectations downwards for the upcoming period, indicating potential concerns about future profitability.
Investors may also find the company's current valuation metrics of interest. Gates Industrial is trading at a high P/E ratio relative to near-term earnings growth, with a PEG ratio of 1.61 as of Q4 2023. While the company's stock price movements have been quite volatile, with a 1-year price total return of -7.58%, its liquid assets exceed short-term obligations, suggesting a solid financial footing.
For those looking to delve deeper into Gates Industrial's financials and future outlook, InvestingPro offers additional tips. Currently, there are 7 more InvestingPro Tips available for Gates Industrial, which can be accessed by visiting Investing.com/pro/GTES. To enhance your investing strategy, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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