Beacon officials announced on July 17 that the company would commence with a private offering to the tune of $500 million in secured notes payable in 2030 to help with the company’s stock buyback plan to repatriate 400,000 shares of Class A Preferred Stock. 

In a news release, the company said Beacon Sales Acquisition, Inc., would fully and unconditionally guarantee the notes. Officials said the offering is subject to market and other conditions, and there is no assurance that the offering will be completed or, if completed, as to the terms on which it will be completed.

Beacon said it plans to use the net proceeds from the offering, together with cash on hand and available borrowings under its senior secured asset-based revolving credit facility, to “consummate the previously announced repurchase of all 400,000 outstanding shares of Series A Cumulative Convertible Participating Preferred Stock held by an entity affiliated with the investment firm Clayton Dubilier & Rice, LLC. The shares are valued at a cash equivalent of $804.5 million. The funding would also pay all accrued and unpaid dividends on such shares of Series A Preferred Stock as of the repurchase date and pay all related transaction fees and expenses.

The company said notes would be offered only to persons reasonably believed to be qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended, and to certain non-U.S. persons in transactions outside the United States under Regulation S under the Securities Act. 

The news release emphasized that the issuance and sale of the notes and related subsidiary guarantee have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction. The company has not officially committed to the plan and may not even be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.

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