Rexnord Announces Pricing of Public Offering of Mandatory Convertible Preferred Stock

MILWAUKEE--()--Rexnord Corporation (NYSE:RXN) today announced the pricing of its previously announced underwritten public offering of 7,000,000 depositary shares, each of which represents a 1/20th interest in a share of its 5.75% Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”). The underwriters of the offering have an option to buy up to 1,050,000 additional depositary shares to cover over-allotments.

The offering price is $50.00 per depositary share. The offering is expected to close on December 7, 2016, subject to customary closing conditions.

Holders of the depositary shares will be entitled to a proportional fractional interest in the rights and preferences of the Mandatory Convertible Preferred Stock, including conversion, dividend, liquidation and voting rights, subject to the provisions of a deposit agreement with the depositary. Dividends on the Mandatory Convertible Preferred Stock will be payable on a cumulative basis when, as and if declared by Rexnord’s board of directors, or an authorized committee of the board of directors, at an annual rate of 5.75% on the liquidation preference of $1,000 per share ($50 per depositary share). Rexnord may pay declared dividends in cash or, subject to certain limitations, in shares of its common stock or in any combination of cash and common stock on February 15, May 15, August 15 and November 15 of each year, commencing on February 15, 2017 and ending on, and including, November 15, 2019.

Unless earlier converted, each share of Mandatory Convertible Preferred Stock will automatically convert on or around November 15, 2019 into between 47.6420 and 39.7020 shares of Rexnord’s common stock (and between 2.3821 and 1.9851 shares of common stock per depositary share), subject to anti-dilution adjustments. The number of shares of Rexnord’s common stock issuable on mandatory conversion will be determined based on the average volume-weighted average price of Rexnord’s common stock over the 20 trading day period beginning on, and including, the 22nd scheduled trading day prior to November 15, 2019.

Rexnord estimates that the net proceeds from this offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by it for this offering, will be approximately $339.1 million (or approximately $390.1 million if the underwriters exercise their over-allotment option in full). Rexnord intends to use the net proceeds from this offering to repay a portion of its outstanding term loan indebtedness under its credit agreement and for general corporate purposes.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Barclays Capital Inc. and Citigroup Global Markets Inc. are acting as joint book-running managers of the offering.

This offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (“SEC”). The offering will be made only by means of a prospectus supplement and the accompanying prospectus, copies of which may be obtained by contacting: Credit Suisse Securities (USA) LLC at 11 Madison Avenue, New York, New York, 10010, Attn: LCD-IBD or Deutsche Bank Securities Inc., Attn: Prospectus Group, 60 Wall Street, New York, NY, 10005-2836, by calling 1-800-503-4611 or by emailing prospectus.cpdg@db.com. These documents will also be filed with the SEC and will be available at the SEC’s website at http://www.sec.gov.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of these securities nor shall there be any sale of these 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.

About Rexnord

Headquartered in Milwaukee, Wisconsin, Rexnord is comprised of two strategic platforms, Process & Motion Control and Water Management, with approximately 8,000 employees worldwide. The Process & Motion Control platform designs, manufactures, markets and services specified, highly-engineered mechanical components used within complex systems. The Water Management platform designs, procures, manufactures and markets products that provide and enhance water quality, safety, flow control and conservation.

Forward-Looking Statements

Information in this release may involve outlook, expectations, beliefs, plans, intentions, strategies or other statements regarding the future, which are forward-looking statements. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Rexnord Corporation as of the date of the release, and Rexnord Corporation assumes no obligation to update any such forward-looking statements. The statements in this release are not guarantees of future performance, and actual results could differ materially from current expectations. Numerous factors could cause or contribute to such differences. Please refer to “Risk Factors” and “Cautionary Notice Regarding Forward-Looking Statements” in the Company’s Form 10-K for the fiscal year ended March 31, 2016 as well as the Company’s annual, quarterly and current reports filed on Forms 10-K, 10-Q and 8-K from time to time with the SEC for a further discussion of the factors and risks associated with the business.

Contacts

Rexnord Corporation
Rob McCarthy, 414-223-1615
Vice President – Investor Relations

Contacts

Rexnord Corporation
Rob McCarthy, 414-223-1615
Vice President – Investor Relations