Flowserve Announces $300 Million Accelerated Share Repurchase Program
The ASR is part of both the company’s recently authorized $1 billion share repurchase program and its new capital structure strategy
DALLAS, June 14, 2012 – Flowserve Corporation (NYSE:FLS), a leading provider of flow control products and services for the global infrastructure markets, today announced that it has entered into an accelerated share repurchase (ASR) agreement with J.P. Morgan to repurchase an aggregate of $300 million of the company’s common stock. The ASR is part of both the company’s recently authorized $1 billion share repurchase program and its new capital structure strategy designed to prudently increase leverage while accelerating return of capital to shareholders.
At inception of the ASR, the company will receive approximately 80% of the total shares that would be repurchased at current share prices. The number of shares to be delivered at program completion, net of the initial delivery, will be based generally on the volume-weighted average price of Flowserve common stock during the repurchase period. The company anticipates that all repurchases under the ASR will be completed before the end of 2012.
The ASR is being funded through a combination of cash on hand, existing revolver capacity and proceeds from a new $250 million term loan, which the company executed today. The term loan bears an initial interest rate the same as, and contains terms similar to, the company’s existing credit facility. The company’s new capital structure strategy targets a gross leverage ratio of 1.0x-2.0x through the business cycle.
Mark Blinn, Flowserve president and chief executive officer, said, “This ASR represents a decisive step toward implementing the capital structure strategy we announced last month, and it further demonstrates our commitment to creating shareholder value through effective cash deployment.”
Flowserve Corp. is one of the world's leading providers of fluid motion and control products and services. Operating in more than 55 countries, the company produces engineered and industrial pumps, seals and valves as well as a range of related flow management services. More information about Flowserve can be obtained by visiting the company's website at www.flowserve.com.
Technical Contact: Mike Mullin, director, investor relations, (972) 443-6636
Media Contact: Steve Boone, director, global communications and public affairs, (972) 443-6644