Protection One files $1.72m stock offering

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Saturday, September 1, 2007

LAWRENCE, Kan.--In a move that appears to be structured, in part, to reduce debt and interest payments on its debt, Protection One on July 12 said in an SEC filing it and its stockholders may sell up to $172.5 million 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 S3 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. Executives at the company declined comment during the 30-day offering period.
As Security Systems News went to press on August 7, Protection One was also preparing for an August 14 conference call to discuss second quarter results.