Brunswick Corporation announced that its board of directors has approved a new share repurchase authorization of $450 million and declared a regular quarterly dividend.
A regular quarterly dividend on Brunswick common stock of $0.21 per share will be payable on June 14, 2019, to shareholders of record on May 21, 2019.
In a separate action, the board of directors approved a new share repurchase authorization of $450 million. The $34.8 million of remaining availability under the previous $300 million authorization approved in February 2016 has been fully utilized, due to recent repurchase activity.
“The Fitness divestiture, which is expected to close in the second quarter, will provide $455 million to $465 million of additional cash to deploy against our capital strategy,” explained Brunswick Chief Executive Officer David M. Foulkes. “In addition to share repurchases, we plan to deploy additional capital for mergers and acquisitions and accelerate certain debt repayments previously planned for later in the year. The benefits of the planned actions will provide incremental benefits to our current 2019 capital plan and guidance.
“This announcement underscores the attractive opportunities to deploy capital from the recently announced Fitness sale,” Foulkes continued. “The additional share repurchase authorization is testament to our continued commitment to enhancing shareholder value and is consistent with our objective of deploying capital and free cash flow to drive long-term shareholder value."
The increased share repurchase authorization also underscores the Company’s confidence in its long-term financial performance, according to Foulkes. It will enable the Company to implement short-term repurchase actions, including potential accelerated repurchase activity upon the close of the Fitness sale, as well as provide capacity to repurchase shares systematically over the next couple of years, either in the open market or through privately negotiated transactions.
“Consistent with our objective to strengthen the balance sheet, we plan to execute debt reductions of at least $150 million in 2019, with actions now planned to occur upon the closing of the Fitness divestiture. After executing this action, the Company’s longer-term objective for debt retirement is now approximately $300 million by the end of 2021, including the impact of recently completed refinancing activity,” Foulkes concluded.