GTES - Gates Industrial slides on secondary offering of 5M ordinary shares

Gates Industrial (NYSE:GTES) has dropped ~7% after announcing a secondary offering of 5M ordinary shares. Certain selling stockholders affiliated with Blackstone commenced the offering. In connection with the offering, the selling stockholders intend to grant to the underwriter a 30-day option to purchase up to 750K additional ordinary shares. Gates will not receive any proceeds from the sale. Additionally, the company entered into a share repurchase contract with Citigroup Global Markets to buyback 8M ordinary shares at a price per share equal to the price paid by the underwriter in the offering. The share repurchase will be funded using cash on hand and borrowings under Gates' revolving credit agreement.

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Gates Industrial slides on secondary offering of 5M ordinary shares