HOUSTON, Oct. 15, 2024 (GLOBE NEWSWIRE) — MRC Global Inc. (NYSE: MRC) announced today that it has agreed to repurchase all 363,000 shares of its 6.50% Series A Convertible Perpetual Preferred Stock as part of an agreement with Mario Investments, LLC, the holder of the preferred stock, which is contingent upon, among other things, the completion of a successful term loan financing.
Upon satisfaction of the required conditions in the repurchase agreement, the company will repurchase the preferred stock for a total payment of approximately $361 million, representing 99.5% of the liquidation preference of the preferred stock. The company will also pay accrued dividends through the closing date of the repurchase. MRC Global expects to finance the repurchase with a new senior secured term loan “B” (“Term Loan B”) and a combination of existing cash or borrowings from the company’s asset-based lending (“ABL”) facility.
Rob Saltiel, MRC Global President & CEO stated, “Our strong execution in recent years has strengthened our balance sheet, and in conjunction with increasingly consistent levels of cash generation, has positioned us to have the financial flexibility to pursue this opportunity now. We believe that repurchasing the preferred stock will simplify our capital structure and eliminate shareholder concerns about potential equity dilution through conversion of the preferred stock into common shares. We also expect that this repurchase will be accretive to both cash generation and earnings per share in 2025 and beyond based on current capital market conditions and anticipated financing terms”.
In order to finance the repurchase of the preferred stock, MRC Global is launching later today a $350 million Term Loan B financing with an expected term of seven years. The company is also pursuing an amendment to its ABL facility that would extend its term until 2029. Post-transaction, the company’s net debt leverage ratio is expected to be less than 2 times, based on the previous twelve months of adjusted EBITDA.
There can be no assurance that the company will be able to obtain the Term Loan B or amend the ABL facility, or what the ultimate terms of the facilities will be. The company’s ability to enter into the Term Loan B and amend the ABL facility, and use the proceeds therefrom, depends on, among other things, market conditions, reaching final agreement with lenders and the approval of the company’s board of directors.
In addition, the company is providing selected preliminary third quarter 2024 financial results.
Preliminary Third Quarter 2024 Financial Results
(All of the amounts set forth below are subject to finalization)
- Revenue of approximately $797 million
- Adjusted EBITDA of approximately $48 million, or 6.0% of sales
- Cash flow from operations of approximately $95 million
The company expects to release its full third quarter 2024 results on November 5, 2024, after the market close, as previously scheduled. The company will also hold a conference call to discuss its third quarter 2024 results at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on November 6, 2024, as previously scheduled.
About MRC Global Inc.
Headquartered in Houston, Texas, MRC Global (NYSE: MRC) is the leading global distributor of pipe, valves, fittings (PVF) and other infrastructure products and services to diversified end-markets including the gas utilities, downstream, industrial and energy transition, and production and transmission infrastructure sectors. With over 100 years of experience, MRC Global has provided customers with innovative supply chain solutions, technical product expertise and a robust digital platform from a worldwide network of 219 locations including valve and engineering centers. The company’s unmatched quality assurance program offers over 300,000 SKUs from over 8,500 suppliers, simplifying the supply chain for approximately 10,000 customers. Find out more at www.mrcglobal.com.
