STAG Industrial (STAG) Upsizes & Prices 8.75M Share Offering
Zacks Investment Research | Jan 14, 2020 07:01AM ET
STAG Industrial, Inc. (NYSE:STAG) recently upsized its public offering by 750,000 shares to 8,750,000 shares of its common stock, consisting of 5,600,000 shares offered by the company and 3,150,000 shares offered on a forward basis.
Earlier, the company had announced a public offering of 8 million shares, comprising 5.6 million shares offered by STAG Industrial and 2.4 million shares offered through a forward sale arrangement.
Subject to customary closing norms, the offering is anticipated to close on Jan 16. The company expects to raise gross proceeds of nearly $274.8 million from this offering. Moreover, the forward purchaser and STAG Industrial have offered the underwriters a 30-day option to buy up to an additional 1,312,500 shares.
Net proceeds from the offering will be used to pursue acquisition opportunities, reduce outstanding debt under its $500-million unsecured credit facility, as well as for working capital and other general corporate purposes.
For this offering, STAG Industrial will enter into forward sale agreements, per which the forward purchasers are likely to borrow and sell the shares to the underwriters. Subject to its right to elect cash or net share settlement, the company anticipates to deliver the shares no later than Jan 13, 2021, in exchange for cash proceeds amounting to the applicable forward sale price.
Notably, a forward sale arrangement will enable it to lock in the price of such shares at the time of offering pricing, while at the same time delaying share issuance and the receipt of net proceeds until a funding requirement has occurred.
Also, the common stock offering will boost the company's financial flexibility and help meet its financial obligations. Moreover, it will open up ample scope for deploying capital for long-term growth opportunities.
Per a Zacks Investment Research
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