QIAGEN N.V. (NASDAQ: QGEN; Frankfurt Prime Standard: QIA), the Dutch provider of sample and assay technologies for molecular diagnostics, has announced plans to return approximately $250 million to shareholders through a synthetic share repurchase proposal that combines a direct capital repayment with a reverse stock split.
These actions, which will lead to an adjustment in QIAGEN’s share capital, have been used previously by other large, multinational Dutch companies as an efficient way to provide returns to shareholders. The proposal, if adopted, is expected to be similar to QIAGEN repurchasing approximately $250 million of its own shares, but will enable the return of capital to all shareholders in a much faster and more efficient way than through a traditional open-market repurchase program.
QIAGEN intends to fund the capital repayment, which forms part of a commitment announced in July 2016 to return $300 million to shareholders by the end of 2017, from existing cash reserves and expects to maintain its current non-rated, investment-grade credit profile. The adjustment to QIAGEN’s capital structure will be proposed at an Extraordinary General Meeting of Shareholders (EGM), which is scheduled to take place in October 2016. The related series of transactions are expected to be completed in early January 2017, in part due to a Dutch legal requirement for a two-month creditor objection period after shareholder approval of the proposal. No Dutch dividend withholding tax is expected to be applicable.
Peer Schatz, CEO QIAGEN
Peer M. Schatz, Chief Executive Officer of QIAGEN N.V, commented:
QIAGEN is at an inflection point in setting a new sales growth trajectory, and our commitment to increase returns to shareholders underscores our confidence in achieving our targets and creating greater value. Against the backdrop of our stronger performance and improving cash flow, we are committed to creating a more efficient capital structure while maintaining a healthy balance sheet to increase returns and invest in profitable growth opportunities.”