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Colfax Secures $3B Bank Financing to Fund DJO Global Buyout
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Colfax Corporation has announced that it secured funding for its acquisition of DJO Global Inc. — California-based orthopedic solutions provider. The bank financing agreement for approximately $3 billion has been signed with a consortium of 23 banks, including JPMorgan Chase Bank and Credit Suisse Funding LLC.
Before we get into the details of the financing agreement, a snapshot of the DJO Global buyout deal has been provided here. In November 2018, Colfax agreed to buy DJO Global in $3.15-billion cash transaction from equity funds (private) managed by Blackstone Group.
Colfax decided to pay the buyout price of $3.15 billion through $100 million cash, amounts raised through credit facilities and debts, and $500-$700 million raised through offerings of equity or equity-linked securities.
Bank Financing Deal
As disclosed by Colfax, the bank financing agreement’s terms and conditions are supporting the company’s plans to lower its debt burden and attain investment grade credit ratings. The credit will be extended in forms of revolving credit facility amounting to $1.3 billion, Term A-1 loan (maturing in five years) of $1.225 billion and Term A-2 loan (maturing in two years) of $0.5 billion.
The funds — to be available upon closing of the DJO Global buyout in the first three months of 2019 — will be used for paying the buyout-related fees and consideration as well as refinancing existing credit facilities of Colfax. Further, funds available under the revolving credit facility might be used for funding general corporate purposes and working capital needs.
Zacks Rank & Stocks to Consider
With a market capitalization of nearly $2.9 billion, Colfax currently carries a Zacks Rank #3 (Hold). The company stands to gain from the healthy fabrication technology business, acquired assets, pricing actions and operational efficacy.
It’s worth mentioning here that DJO Global buyout is in sync with Colfax’s efforts to diversify its business structure. This buyout will mark the company’s entry into the orthopedic solutions industry, which currently benefits from tailwinds like changing demographics and rising need for preventive healthcare, among others.
Upon completion, DJO Global’s assets will form a segment within Colfax. In the 12 months after the completion of the acquisition, Colfax anticipates earnings per share (adjusted) accretion from DJO Global. Moreover, it seeks to enjoy tax benefits from DJO Global’s $800-million operating loss carryforwards.
Despite all these positive aspects, inflation in material costs, unfavorable movements in foreign currencies and restructuring expenses might be detrimental to the company’s financials. In the past month, the company’s share price has declined 13.4% against 6.5% growth recorded by the industry it belongs to.
In the past 60 days, the company’s earnings estimates for 2018 have been increased by five brokerage firms and decreased by three. Further, estimates for 2019 were increased by seven firms and decreased by two. Currently, the Zacks Consensus Estimate for earnings remained unchanged at $2.25 for 2018 while grew 2% to $2.55 for 2019 from the 60-day-ago tally.
In the past 60 days, earnings estimates for all these three stocks improved for the current year. Further, positive earnings surprise for the last quarter was 17.95% for DXP Enterprises, 23.64% for EnPro Industries and 60.61% for Luxfer.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
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Colfax Secures $3B Bank Financing to Fund DJO Global Buyout
Colfax Corporation has announced that it secured funding for its acquisition of DJO Global Inc. — California-based orthopedic solutions provider. The bank financing agreement for approximately $3 billion has been signed with a consortium of 23 banks, including JPMorgan Chase Bank and Credit Suisse Funding LLC.
Before we get into the details of the financing agreement, a snapshot of the DJO Global buyout deal has been provided here. In November 2018, Colfax agreed to buy DJO Global in $3.15-billion cash transaction from equity funds (private) managed by Blackstone Group.
Colfax decided to pay the buyout price of $3.15 billion through $100 million cash, amounts raised through credit facilities and debts, and $500-$700 million raised through offerings of equity or equity-linked securities.
Bank Financing Deal
As disclosed by Colfax, the bank financing agreement’s terms and conditions are supporting the company’s plans to lower its debt burden and attain investment grade credit ratings. The credit will be extended in forms of revolving credit facility amounting to $1.3 billion, Term A-1 loan (maturing in five years) of $1.225 billion and Term A-2 loan (maturing in two years) of $0.5 billion.
The funds — to be available upon closing of the DJO Global buyout in the first three months of 2019 — will be used for paying the buyout-related fees and consideration as well as refinancing existing credit facilities of Colfax. Further, funds available under the revolving credit facility might be used for funding general corporate purposes and working capital needs.
Zacks Rank & Stocks to Consider
With a market capitalization of nearly $2.9 billion, Colfax currently carries a Zacks Rank #3 (Hold). The company stands to gain from the healthy fabrication technology business, acquired assets, pricing actions and operational efficacy.
It’s worth mentioning here that DJO Global buyout is in sync with Colfax’s efforts to diversify its business structure. This buyout will mark the company’s entry into the orthopedic solutions industry, which currently benefits from tailwinds like changing demographics and rising need for preventive healthcare, among others.
Upon completion, DJO Global’s assets will form a segment within Colfax. In the 12 months after the completion of the acquisition, Colfax anticipates earnings per share (adjusted) accretion from DJO Global. Moreover, it seeks to enjoy tax benefits from DJO Global’s $800-million operating loss carryforwards.
Despite all these positive aspects, inflation in material costs, unfavorable movements in foreign currencies and restructuring expenses might be detrimental to the company’s financials. In the past month, the company’s share price has declined 13.4% against 6.5% growth recorded by the industry it belongs to.
In the past 60 days, the company’s earnings estimates for 2018 have been increased by five brokerage firms and decreased by three. Further, estimates for 2019 were increased by seven firms and decreased by two. Currently, the Zacks Consensus Estimate for earnings remained unchanged at $2.25 for 2018 while grew 2% to $2.55 for 2019 from the 60-day-ago tally.
Colfax Corporation Price and Consensus
Colfax Corporation Price and Consensus | Colfax Corporation Quote
Some better-ranked stocks in the industry are DXP Enterprises, Inc. (DXPE - Free Report) , EnPro Industries, Inc. (NPO - Free Report) and Luxfer Holdings PLC (LXFR - Free Report) . All these stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for all these three stocks improved for the current year. Further, positive earnings surprise for the last quarter was 17.95% for DXP Enterprises, 23.64% for EnPro Industries and 60.61% for Luxfer.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>