Black Hills Corp. Prices Common Stock and Equity Units Offerings
RAPID CITY, S.D. - Nov. 18, 2015 - Black Hills Corp. (NYSE: BKH) (the "Company") today announced the pricing of a registered public offering of 5.5 million shares of its common stock at $40.25 per share, for total gross proceeds of approximately $221.4 million. In addition, the Company announced the pricing of its registered public offering of 5.2 million equity units, for total gross proceeds of $260.0 million. The offerings (which are not conditioned on one another) are expected to close on or about Nov. 23, 2015, subject to customary closing conditions.
The Company has granted the underwriters a 30-day option to purchase up to an additional 825,000 shares of its common stock, and a 13-day option to purchase up to 780,000 additional equity units, upon the same terms as their respective offerings.
Each equity unit will be issued in a stated amount of $50 and will initially consist of a contract to purchase Company common stock and a 1/20, or 5%, undivided beneficial ownership interest in $1,000 principal amount of remarketable junior subordinated notes due 2028. Pursuant to the purchase contracts, holders are required to purchase Company common stock no later than Nov. 1, 2018.
Total annual distribution on the equity units will be at the rate of 7.75%, consisting of quarterly interest payments on the remarketable junior subordinated notes at a rate of 3.50% per year and quarterly contract adjustment payments on the purchase contracts at a rate of 4.25% per year. The reference price for the equity units is $40.25 per share. The minimum settlement rate under the purchase contracts is 1.0572 shares of Company common stock, which is approximately equal to the $50 stated amount per equity unit, divided by the threshold appreciation price of $47.2938 per share, which represents a premium of approximately 17.5% over the reference price. The maximum settlement rate under the purchase contracts is 1.2422 shares of Company common stock, which is approximately equal to the $50 stated amount per equity unit, divided by the reference price. Each of the settlement rates is subject to adjustment in certain circumstances.
The Company intends to use the proceeds from these offerings, which are expected to be approximately $465.8 million in the aggregate or approximately $535.7 million in the aggregate if the options to purchase additional shares and equity units are exercised in full (after deducting underwriting discounts and commissions but before deducting estimated offering expenses), to partially fund the pending acquisition of SourceGas Holdings LLC. The acquisition is expected to close in the first half of 2016.
Credit Suisse and BofA Merrill Lynch are lead book-running managers, and RBC Capital Markets and Wells Fargo Securities are joint book-running managers, for the common stock offering. BMO Capital Markets is senior co-manager, and J.P. Morgan, Morgan Stanley, Scotia Howard Weil and MUFG are co-managers for the common stock offering. Credit Suisse and Wells Fargo Securities are lead book-running managers, and RBC Capital Markets and BofA Merrill Lynch are joint book-running managers, for the equity units offering. J.P. Morgan, Morgan Stanley and US Bancorp are co-managers for the equity units offering.
Both offerings are being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission, and each offering will be made only by means of a prospectus supplement for such offering and an accompanying prospectus. Copies of the prospectus supplements and accompanying prospectus relating to the common stock and equity units offerings may be obtained from Credit Suisse Securities, One Madison Avenue, New York, NY 10010-3629, Attention: Prospectus Department, by calling toll free 1-800-221-1037 or by email at firstname.lastname@example.org; from BofA Merrill Lynch, 222 Broadway, New York, NY 10038, Attn: Prospectus Department, email email@example.com; from Wells Fargo Securities, LLC, Attention: Equity Syndicate Department, 375 Park Avenue, New York, NY 10152, telephone: 1-800-326-5897 or email: firstname.lastname@example.org; or from RBC Capital Markets, LLC, 200 Vesey Street, 8th Floor, New York, NY 10281; Attention: Equity Syndicate Department, Telephone: 1-877-822-4089, or email: email@example.com.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in any state or jurisdiction in which it is unlawful to make an offer, solicitation or sale.
Black Hills Corporation
Black Hills Corp. (NYSE: BKH) is a growth-oriented, vertically-integrated energy company with a tradition of improving life with energy and a vision to be the energy partner of choice. Based in Rapid City, South Dakota, the company serves 792,000 natural gas and electric utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The company also generates wholesale electricity and produces natural gas, oil and coal. Black Hills Corp.'s more than 2,000 employees form partnerships and produce positive results for our customers, communities and shareholders.
Investor Relations Contact
Jerome E. Nichols
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Caution Regarding Forward-Looking Statements
This news release includes "forward-looking statements" as defined by the Securities and Exchange Commission, or SEC. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this news release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, are forward-looking statements, including statements regarding the expected proceeds from the offerings and the expected closing date of the acquisition. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements, including, without limitation, the risk factors described in the prospectus supplements and the accompanying prospectus for the common stock and equity units offerings, Item 1A of Part I of our 2014 Annual Report on Form 10-K, as amended by Form 10-K/A filed on August 7, 2015, Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2015, and other reports that we file with SEC from time to time.
New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time-to-time, and it is not possible for us to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. We assume no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.
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Source: Black Hills Corporation via Globenewswire