Wednesday, March 03, 2021
ACCO Brands Corporation (ACCO)
Note Offering
ACCO Brands Corporation designs, manufactures, sources, markets, and sells office products, academic supplies, and calendar products primarily in the United States, Canada, Northern Europe, Brazil, Australia, and Mexico. It operates through three segments: ACCO Brands North America, ACCO Brands EMEA, and ACCO Brands International. The company offers office products, such as stapling, binding and laminating equipment, and related consumable supplies, as well as shredders and whiteboards; and academic products, including notebooks, folders, decorative calendars, and stationery products. It also provides private label products, as well as business machine maintenance and repair services. The company offers its business, academic, and calendar product lines under the Artline, AT-A-GLANCE, Derwent, Esselte, Five Star, GBC, Hilroy, Leitz, Marbig, Mead, NOBO, Quartet, Rapid, Rexel, Swingline, Tilibra, Wilson Jones, and other brand names. In addition, it designs, sources, distributes, markets, and sells accessories for laptop and desktop computers, and tablets comprising security products; input devices, such as presenters, mice, and trackballs; ergonomic aids, including foot and wrist rests; docking stations; and other personal computers and tablet accessories under the Kensington, Microsaver, and ClickSafe brand names. The company sells its products to consumers and commercial end-users primarily through resellers, including traditional office supply resellers, wholesalers, mass merchandisers, and retailers, as well as directly to consumers through on-line and direct mail. ACCO Brands Corporation is headquartered in Lake Zurich, Illinois.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Offering. On March 1st, ACCO announced a private offering of $575 million 4.25% senior unsecured notes due 2029. Proceeds from the offering will be used to redeem all $375 million 5.25% outstanding senior unsecured notes due December 2024. The balance of the funds will be used to repay a portion of the outstanding borrowings under the revolving credit facility, reportedly $180 million, and to pay fees and expenses associated with the offering. The company expects to close the offering on March 15, 2021, subject to customary closing conditions.
Positive. Given the Company is swapping out higher interest cost debt with lower cost debt, extending the maturity profile, and feeing up some portion of the credit facility, we view the offering as a positive for ACCO. If we assume $180 million is used to pay down the revolver, we calculate the new weighted average interest rate to be about 3.58%, compared to 3.77% at year-end. There will be about …
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.