Moog Inc. plans to raise nearly $80 million, and possibly slightly more than $90 million, by selling additional shares of its stock, the Elma-based motion control equipment manufacturer said.
Moog will use the proceeds, after underwriting fees are deducted, to repay most of the money it borrowed to buy the flight control actuation business of GE Aviation Systems in Wolverhampton, England.
The company is selling 2.5 million shares of its Class A common stock, which fell 4 percent, or $1.32, on Tuesday to $30.67. The offering's underwriters also have the option of selling an additional 375,000 shares if the demand is sufficient.
At that price, the stock sale would raise $78 million, although the proceeds to the company would be less than that because of underwriting fees it must pay. Moog officials declined to estimate how much the fees would be.
If the company is able to sell the additional 375,000 shares, the gross proceeds would rise to about $90 million.
Moog completed the $90 million acquisition of the GE actuation business on Monday, using money it borrowed from its revolving credit lines. The stock sale would allow the company to repay most of those borrowings.
The stock sale also would dilute the holdings of Moog's existing shareholders. The company said the stock sale would reduce its forecasted earnings per share of $2.36 by 10 cents, to $2.26. If even more shares are sold through the over allotment option, the dilution would be almost 2 cents per share more.
The stock sale comes as Moog's shares have recovered partly from their precipitous fall since last September. While the stock is down 37 percent from its mid-September 2008 peak of $48.25, it has rebounded by 69 percent from its low of $18.17 in early March. Since the beginning of this year, Moog's shares are down 16 percent.
Moog joins First Niagara Financial Group as the second Buffalo Niagara-based company to tap into the revived market for secondary stock offerings.
That market slowed to a crawl a year ago, as the stock market tumbled, reducing the potential proceeds for companies selling shares.
But September is shaping up as the second-best month for secondary offerings this year, with 88 deals raising $18.6 billion, according to data compiled by Bloomberg. That's almost double the total raised in secondary offerings during the first three months of this year.