JERICHO, N.Y., Aug. 7 /PRNewswire-FirstCall/ -- Griffon Corporation
(NYSE: GFF) announced today a 20 million share common stock rights offering to
its shareholders in order to raise equity capital for general corporate
purposes and to fund future growth. The rights will have an exercise price of
$8.50 per share. GS Direct, L.L.C., an affiliate of Goldman, Sachs & Co., has
agreed to back stop the rights offering by purchasing on the same terms any
and all shares not subscribed through the exercise of rights. GS Direct will
purchase additional shares of common stock at the rights offering price if it
does not acquire a minimum of 10 million shares of common stock as a result of
its back stop commitment. The transactions are expected to raise gross
proceeds of between approximately $170 and $255 million.
The Company intends to file with the Securities and Exchange Commission a
registration statement covering these transactions, and the distribution of
rights and commencement of the rights offering will occur promptly following
the effectiveness of that registration statement.
Under the terms of the rights offering, the Company will distribute at no
charge to the holders of its common stock transferable rights to purchase up
to an aggregate of approximately 20 million new shares of common stock. The
Company will distribute to each such holder one transferable right for every
share of common stock owned on the record date, which will be set forth in a
prospectus to be filed with the Securities and Exchange Commission. Each right
will entitle the holder to purchase .66 shares of common stock at the
subscription price of $8.50 per share of common stock. Record date
stockholders who fully exercise their rights will be entitled to subscribe,
subject to certain limitations and subject to allotment, for additional shares
that remain unsubscribed as a result of any unexercised rights in an amount
equal to up to 20% of their shareholdings as of the record date. Consummation
of the rights offering is subject to customary closing conditions.
In connection with the rights offering, GS Direct has agreed, subject to
certain terms and conditions, to purchase from the Company promptly after the
closing of the rights offering, at the subscription price, all of the shares
for which subscriptions were not received as part of the rights offering. In
addition, in the event GS Direct acquires less than 10 million shares of
common stock in the backstop commitment, GS Direct has committed, subject to
certain conditions, to purchase from the Company an additional number of
shares at the subscription price such that it will have acquired in the
aggregate with the backstop commitment 10 million shares of common stock.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any sale of
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state. The rights offering, which is expected to be launched
immediately following the effectiveness of a registration statement relating
to the offering, will be made only by means of a prospectus.
Forward-looking Statements
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: All statements other than statements of historical fact included in
this release, including without limitation statements regarding the company's
financial position, business strategy and the plans and objectives of the
company's management for future operations, are forward-looking statements.
When used in this release, words such as "anticipate", "believe", "estimate",
"expect", "intend", and similar expressions, as they relate to the company or
its management, identify forward-looking statements. Such forward-looking
statements are based on the beliefs of the company's management, as well as
assumptions made by and information currently available to the company's
management. Actual results could differ materially from those contemplated by
the forward-looking statements as a result of certain factors, including but
not limited to, business, financial market and economic conditions, including,
but not limited to, the credit market, the housing market, results of
integrating acquired businesses into existing operations, the results of the
company's restructuring and disposal efforts, competitive factors and pricing
pressures for resin and steel, capacity and supply constraints and the ability
to consummate the rights offering. Such statements reflect the views of the
company with respect to future events and are subject to these and other risks,
uncertainties and assumptions relating to the operations, results of
operations, growth strategy and liquidity of the company as previously
disclosed in the company's SEC filings. Readers are cautioned not to place
undue reliance on these forward-looking statements. The company does not
undertake to release publicly any revisions to these forward-looking
statements to reflect future events or circumstances or to reflect the
occurrence of unanticipated events.
About Griffon Corporation
Griffon Corporation, headquartered in Jericho, New York, is a diversified
holding company consisting of three distinct business segments: Electronic
Information and Communication Systems, through Telephonics Corporation; Garage
Doors, through Clopay Building Products Company; and Specialty Plastic Films,
through Clopay Plastic Products Company. Telephonics Corporation's
high-technology engineering and manufacturing capabilities provide integrated
information, communication and sensor system solutions to military and
commercial markets worldwide. Telephonics specializes in aircraft
intercommunication systems, wireless communication systems, radars,
identification friend or foe products, integrated security systems, air
traffic management systems, aerospace electronics, and the performance of
threat and radar system analyses. Clopay Building Products Company is a
leading manufacturer and marketer of residential garage doors to professional
installing dealers and major home center retail chains. Clopay Plastic
Products is an international leader in the development and production of
embossed, laminated and printed specialty plastic films used in a variety of
hygienic, health-care and industrial markets. For more information on the
company and its operating subsidiaries, please see the company's website at
www.griffoncorp.com.
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