Valmont Industries (VMI) to Sell $500M Senior Notes - Analyst Blog

Valmont Industries, Inc. (VMI), a leading steel pipe and tube company, announced that it will sell $250 million principal amount of its 5.00% senior notes due Oct 1, 2044, and $250 million principal amount of its 5.25% senior notes due Oct 1, 2054. The company will pay semi-annual interests on Apr 1 and Oct 1 each year, effective Apr 1, 2015.

The company will utilize some of the proceeds to buy up to $200 million principal amount of its $450 million aggregate principal amount of 6.625% senior unsecured notes due 2020. The remaining net proceeds will be utilized for general corporate purposes, including share buybacks.

The offering is expected to close on Sep 22, 2014, after meeting some closing conditions. BofA Merrill Lynch, J.P. Morgan Securities LLC, Goldman, Sachs & Co., US Bancorp and Wells Fargo Securities are the joint book-running managers for the offering.

Valmont released its second-quarter 2014 results in Jul 2014. The company posted a profit of $64 million or $2.38 per share in the quarter, down roughly 28.6% from $89.6 million or $3.33 per share in the year-ago quarter. Earnings per share were in line with the Zacks Consensus Estimate.

Valmont, which is among the prominent steel-pipe and tube companies along with MRC Global Inc. (MRC), Mueller Water Products, Inc. (MWA) and Tenaris SA (TS), registered revenues of $842.6 million in the quarter, down 4.1% from $878.7 million in the year-ago quarter. The decrease was mainly due to lower sales in the Utility Support Structures, Coatings and Irrigation segments. Sales lagged the Zacks Consensus Estimate of $860 million.

Valmont currently carries a Zacks Rank #3 (Hold).