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Patrick Industries Announces $125 Million Offering

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Patrick Industries intends to offer $125 million in convertible senior notes in a private offering to qualified institutional buyers. Additionally, the company said it would grant the initial purchasers of those notes a 30-day option to purchase up to an additional $18.75 million aggregate principal amount of the convertible notes, solely to cover over-allotments, if any.

The notes would come due on Feb. 1, 2023.

Patrick Industries said the convertible notes are expected to pay interest semiannually in arrears and can be convertible into cash, shares of the company’s common stock or a combination thereof, at the company’s election, based on a conversion rate to be determined.

The convertible Notes will mature on Feb. 1, 2023 – unless earlier purchased or converted. Prior to Aug. 1, 2022, the convertible notes may be converted at the option of the holders only upon the occurrence of specified events and during certain periods, and thereafter until the close of business on the second scheduled trading day immediately preceding the maturity date, the convertible notes may be converted at any time.

In connection with the offering, the company expects to enter into convertible note hedge transactions with one or more of the initial purchasers of the convertible notes or their respective affiliates (in this capacity, the “option counterparties”). The company also expects to enter into warrant transactions with the option counterparties.

Patrick Industries said it intends to use part of the net proceeds from this offering in alignment with its capital allocation strategy, which includes funding future potential acquisitions, investing in its infrastructure through strategic capital expenditures and expansions, and for general corporate purposes. Additionally, the company intends to use part of the net proceeds from this offering to repay a portion of the amounts due under its current credit facility, and part of the money the cost of convertible note hedge transactions that the company expects to enter into with buyers of the senior notes.

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