What investors need to know is that the shares are being sold by funds affiliated with private equity player CCMP Capital. None of the proceeds will go to Generac or to its officers and directors.
The SEC filing on record shows that CCMP Capital will still own 14,512,998 shares after this offering. That translates to what remains the highest outside stake, at 21.2%, of the generator company.
Generac shares closed at $38.17 on Monday, against a 52-week trading range of $18.35 to $41.40. The aftermath of Hurricane Sandy and other weather related instances have given a serious boost to Generac and its $2.6 billion valuation.
Currently shares are trading down just over 3% at $37.00 in active trading. After the drop this Tuesday, Generac shares trade at only about 11.4 times the expected consensus earnings estimate for 2013. That may not sound expensive at all, but note that Generac’s main source of sales is selling new equipment year after year.
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