Alliance Laundry Systems (NYSE:ALH) shares declined 2.2% on Monday after the commercial laundry equipment provider announced a secondary public offering involving 20.5 million shares held by its principal stockholder, BDT Capital Partners, LLC and affiliated investment funds.
The transaction is being conducted as an underwritten public offering, with the selling stockholder also planning to give the underwriters a 30-day option to purchase up to an additional 3.075 million shares.
Alliance Laundry itself is not issuing any shares through the offering and will receive no proceeds from the stock sold by BDT Capital and its affiliates.
Alliance Laundry plans $75 million share repurchase
Alongside the secondary offering, Alliance Laundry intends to repurchase shares from the underwriters for an aggregate price of approximately $75 million.
The company will pay the same per-share price that the underwriters pay to acquire shares from the selling stockholder. No underwriting fees will be charged on the shares purchased by Alliance Laundry as part of the repurchase.
Completion of the buyback is dependent on the secondary offering going ahead. The wider transaction also remains subject to market conditions and other customary factors.
BofA Securities and J.P. Morgan lead offering
BofA Securities and J.P. Morgan are serving as joint book-running managers for the share sale.
The planned offering increases the amount of Alliance Laundry stock potentially available to public investors, while the accompanying $75 million repurchase will absorb a portion of the shares being sold.
The announcement prompted some selling pressure on Monday, with Alliance Laundry shares falling 2.2% following news of the transaction.
Alliance Laundry operates across around 150 countries
Alliance Laundry is a commercial laundry equipment provider with operations serving approximately 150 countries and a workforce of more than 4,000 employees.
Its portfolio includes several established commercial laundry brands, including Speed Queen, UniMac, Huebsch, Primus and IPSO.