Cummins plans to repurchase $500 million of the company’s common stock as part of a previously announced plan to return 75 percent of operating cash flow to shareholders this year.
This story by Kirk Johannesen originally appeared on TheRepublic.com.
The Columbus, Ohio-based global power company said it has entered into an accelerated share repurchase agreement with Goldman, Sachs & Co. Under terms of the agreement, Cummins will repurchase the stock from Goldman, Sachs & Co., with an initial delivery of about 3 million shares based on current market prices.
The final number of shares to be repurchased will be based on Cummins’ volume-weighted average stock price during the term of the transaction, less a discount, the company said.
Chairman and CEO Tom Linebarger said July 31 during the company’s second-quarter earnings release – which reflected record quarterly sales and profits – that Cummins would increase operating cash flow to shareholders, in the form of dividends and share repurchases, from 50 to 75 percent this year.