Jabil's stock sale tops $500-million

Proceeds from the offering will enable the St. Petersburg company to pay down debt and fund future growth.

Personal Finance editor HELEN HUNTLEY E-mail: Click here Archive

By HELEN HUNTLEY

© St. Petersburg Times, published June 7, 2000

ST. PETERSBURG -- Fast-growing Jabil Circuit Inc. raised more than a half-billion dollars to finance future expansion by selling 13-million shares of stock in a deal made public Tuesday morning.

The stock sale appears to be the largest ever by a Tampa Bay company and among the largest by any Florida-based company.

The stash of cash gives Jabil buying power at a time when many companies are contracting out their manufacturing and putting their factories and equipment up for sale. A company such as Jabil, which makes circuit board assemblies for multiple customers, often can use factories more efficiently.

"We're going to be in a position to keep pace with growth in the industry," said Chris Lewis, chief financial officer for St. Petersburg-based Jabil, which had $2-billion in revenues last year.

Jabil's parts end up in communication, computer and automotive equipment sold by companies such as Hewlett-Packard Co. and Cisco Systems Inc.

After expenses, Jabil will keep about $525-million of the $542.75-million proceeds from the offering.

Of that, Lewis said about $200-million will be used to repay debt. That will restore the full $500-million in borrowing power of an existing line of credit.

In addition to the $500-million credit line and the $325-million in new cash in the bank, Jabil still has the capacity to raise more than $200-million through the sale of securities under the $750-million "shelf offering" that was tapped for this week's transaction.

Use of a shelf offering allows a company to file paperwork in advance, speeding up the process when securities are issued.

Jabil sold its shares in one lot to a California-based underwriter instead of the more typical approach of offering shares through a network of brokerage firms.

CFO Lewis said the method, similar to that commonly used to sell bonds, was the most efficient way for the company to raise capital.

Thomas Weisel Partners LLC of San Francisco bought all the Jabil shares Monday for $41.75 a share, then resold them overnight to about 90 large institutional investors such as money managers and pension funds.

"They had about 100 people working through the afternoon and night and in Europe to sell the stock," Lewis said. He said Jabil increased the size of the offering from 12-million shares to meet the demand.

About 12 percent of the stock was sold in Europe, where Jabil has participated in several conferences to court investors.

"European investors are starting to take more interest in our industry," Lewis said.

Jabil stock closed Tuesday at $41.75 a share in trading on the New York Stock Exchange, down $1.

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