Fortive Corporation Prices Offering of 5.00% Mandatory Convertible Preferred Stock

Fortive Corporation (“Fortive”) (NYSE: FTV) announced that it has priced its underwritten public offering of 1,200,000 shares, or $1.2 billion aggregate liquidation preference, of its 5.00% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share (“mandatory convertible preferred stock”), at a public offering price of $1,000 per share. Fortive has also granted the underwriters an option for a period of 30 days to purchase up to an additional 180,000 shares, or $180.0 million aggregate liquidation preference, of the mandatory convertible preferred stock, solely to cover over-allotments.

The issuance of the shares of mandatory convertible preferred stock is expected to close on June 29, 2018, subject to customary closing conditions.

Fortive estimates that the net proceeds from the sale of the shares of the mandatory convertible preferred stock will be approximately $1.16 billion, or approximately $1.34 billion if the underwriters exercise in full their option to purchase additional shares, in each case after deducting the underwriting discounts and commissions and estimated offering costs payable by Fortive.

Fortive intends to use the net proceeds from this offering to fund its acquisition activities, including acquisitions, if any, that may be consummated in 2018 or the acquisition of Johnson & Johnson’s sterilization solutions business used in the fields of low-temperature terminal sterilization and high-level disinfection. Completion of this offering is not contingent upon consummation of any acquisition. Fortive may also use the net proceeds for general corporate purposes, including repayment of debt, working capital and capital expenditures.

Unless converted earlier at the option of the holder, each share of mandatory convertible preferred stock will automatically convert on July 1, 2021 (subject to postponement for certain market disruption events), into between 10.8554 and 13.2979 shares of Fortive’s common stock, subject to customary anti-dilution adjustments.

Dividends on the mandatory convertible preferred stock will be payable on a cumulative basis when, as and if declared by Fortive’s board of directors (or an authorized committee of Fortive’s board of directors), at an annual rate of 5.00% of the liquidation preference of $1,000 per share. If declared, these dividends will be paid in cash or, subject to certain limitations, in shares of Fortive’s common stock or in a combination of cash and shares of Fortive’s common stock, at Fortive’s election, on January 1, April 1, July 1 and October 1 of each year, commencing October 1, 2018, and to, and including, July 1, 2021.

Morgan Stanley & Co. LLC, UBS Investment Bank and BofA Merrill Lynch are acting as joint book-running managers for the offering. In addition, Barclays, Citigroup, Goldman Sachs & Co. LLC and US Bancorp are also acting as joint book-running managers for the offering.

The offering is being made pursuant to an effective registration statement on Form S-3 (including a prospectus) filed with the U.S. Securities and Exchange Commission (the “SEC”). Prospective investors should read the prospectus forming a part of that registration statement and the prospectus supplement related to the offering and the other documents that Fortive has filed with the SEC for more complete information about Fortive and this offering. These documents are available at no charge by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the prospectus and prospectus supplement relating to the offering, when available, may be obtained from the Morgan Stanley Prospectus Department at Morgan Stanley & Co. LLC, Attn: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014 or from the UBS Investment Bank Prospectus Department at UBS Investment Bank, Attn: UBS Prospectus Dept., 1285 Avenue of the Americas 25th Floor, New York, NY 10019 or by calling toll-free 888-827-7275 or from the BofA Merrill Lynch Prospectus Department at BofA Merrill Lynch, Attn: Prospectus Department, 200 North College Street, 3rd Floor, Charlotte, NC 28255-0001 or [email protected].

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the shares of mandatory convertible preferred stock, nor shall there be any offer, solicitation or sale of the shares of mandatory convertible preferred stock in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

Forward-Looking Statements

Statements in this release that are not strictly historical, including statements regarding the terms of the proposed offering, the timing and completion of the offering, Fortive’s intended use of proceeds, the ASP Transaction and any other statements regarding events or developments that Fortive expects or anticipates will or may occur in the future, are “forward-looking” statements within the meaning of the federal securities laws. There are a number of important risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These risks and uncertainties include, among other things, risks and uncertainties relating to capital markets conditions and completion of the offering, the ability of the parties to the ASP Transaction to satisfy the conditions to the acquisition on a timely basis and such parties’ ability to complete the acquisition on the anticipated terms and schedule, including the ability to obtain regulatory approvals. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in Fortive’s SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2017 and its Quarterly Report on Form 10-Q for the quarter ended March 30, 2018. These forward-looking statements speak only as of the date of this release, and Fortive does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.

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Fortive Corporation
Lisa Curran, 425-446-5000
Vice President, Investor Relations
6920 Seaway Boulevard
Everett, WA 98203