In a move aimed at raising more than $60 million, Bergen Brunswig Corp. on Thursday filed registration statements with the Securities and Exchange Commission for two public offerings.
The Orange company, a diversified distributor of pharmaceuticals and consumer electronics, said it wants to raise $40 million in an offering of exchangeable subordinated debentures. Drexel Burnham Lambert Inc. is to handle the offering.
The second offering is for an initial public sale by its wholly owned subsidiary, Commtron Corp., of 2 million currently unissued shares of Class A common stock, through an underwriting syndicate managed by Drexel Burnham and Bear, Stearns & Co.
George Reinhardt Jr., Bergen Brunswig's vice president and chief financial officer, said the company contemplates an offering price of between $11 and $14 per share, for a total of $22 million to $28 million.
Reinhart said proceeds of the two offerings are to be combined and used by Bergen Brunswig to repay bank debt, provide working capital and finance future acquisitions.
He said the decision to sell 2 million shares of Commtron, Bergen Brunswig's consumer electronics distribution arm, was made to "provide a market valuation of BBC's investment in Commtron," to provide Commtron "the ability to develop a line of credit independent of its parent" and to give it "flexibility in future acquisitions."
Will Retain Majority Holding
Bergen Brunswig will retain 80% of the company by holding 3 million shares of Class A common stock and 5 million shares of Class B common, which enables Bergen Brunswig to elect a majority of Commtron's board of directors.
Reinhardt said, however, that there could be a future dilution of Bergen Brunswig's ownership of the company.
The debentures to be issued, he said, are exchangeable for shares of Commtron's Class A common stock currently owned by Bergen Brunswig.