Protection One announces conference call, files stock offering

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Thursday, August 9, 2007

LAWRENCE, Kan.--Protection One announced that it will hold a conference call on August 14 to discuss second quarter results.
The security giant is nearing the end of its 30-day offering period on a stock offering that appears to be structured, in part, to reduce debt and interest payments on its debt. The company's July 12 S3 SEC filing announced that Protection One and its stockholders may sell up to $172.5 million worth of primary and secondary shares of its stock.
The filing said the company intended to use net proceeds from the stock sale to repurchase a portion of the $110.3 million aggregate principal amount of its outstanding 8.125% senior subordinated notes due in 2009. However, the secondary shares will be sold by shareholders who would retain the net proceeds from those sales.
The sale of shares to repurchase these notes would reduce Protection One's debt, which is currently around $500 million, net of cash, and also reduce interest payments on that debt.
Protection One did not specify in the filing how many shares will be sold by the company or what the price of the shares would be. Approximately 70 percent of the company is currently owned by Quadrangle, a private equity group. If $172 million shares were sold at $12 (the price around which the stock currently hovers), that would make 14 million shares available for sale. The company currently has roughly 28 million shares issued. Protection One executives declined comment during the 30-day offering period.