Equity Transactions

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Equity Transactions

Equity Transactions

As of December 31, 2016, 3.43 million shares of the Company's common stock have been authorized to be repurchased under the Board of Directors approved share repurchase program and 0.2 million shares remain available for repurchase.  Under the terms of the program, the Company may repurchase shares of its common stock from time to time at its discretion through open market repurchases, privately negotiated transactions and/or other mechanisms, depending on price and prevailing market and business conditions. The program, which has no specified term, may be suspended or terminated at any time. 

During the year ended December 31, 2016, the Company repurchased a total of 2,572,417 common shares for approximately $233.7 million, under board approved repurchases which included the repurchase of 1,727,746 common shares at a price of $93.50 per share for a total purchase price of $161.5 million with Bank of Montreal Holdings Inc. pursuant to a Stock Purchase Agreement and the repurchase of 556,516 shares, representing 6.7% of the Company's common stock outstanding, pursuant to a "modified Dutch Auction" tender offer. As of December 31, 2016, the Company has repurchased a total of 3,786,561 shares of common stock at a weighted average price of $103.38 per share plus transaction costs for a total cost of $391.5 million.

During each quarter of the year ended December 31, 2016, the Board of Directors declared quarterly cash dividends of $0.45 each. Total dividends declared were $13.0 million for the year ended December 31, 2016. At December 31, 2016, $3.5 million is included as dividends payable in liabilities in the Consolidated Balance Sheet, primarily representing the fourth quarter dividend to be paid on February 10, 2017 to all shareholders of record on January 31, 2017.

On February 1, 2017, the Company issued 910,000 shares of common stock and 1,150,000 shares of 7.25% mandatory convertible preferred stock ("MCPS") in a public offering which included the exercised over-allotment option for the MCPS offering for net proceeds of $207.1 million, after underwriting discounts, commissions and other offering expenses. On February 24, 2017, the underwriters exercised their option to purchase an additional 136,500 shares of common stock for net proceeds of $14.3 million. The mandatory convertible preferred stock was issued and has a liquidation preference of $100.00 per share. Unless converted earlier, each share of mandatory convertible preferred stock will convert automatically on February 1, 2020 (the "mandatory conversion date") into between 0.7576 and 0.9091 shares of common stock, subject to customary anti-dilution adjustments. The number of shares of common stock issuable upon conversion will be determined based on the average volume-weighted average price per share of Virtus common stock over the 20 consecutive trading day period beginning on, and including, the 22nd scheduled trading day immediately preceding the mandatory conversion date. Each share of MCPS can be converted prior to the mandatory conversion date at the option of the holder at the minimum conversion rate of 0.7576 or at specified rate, in the event of a fundamental change as defined in the certificate of designations of the MCPS.

Dividends on the mandatory convertible preferred stock will be payable on a cumulative basis when, as and if declared by Virtus' board of directors, at an annual rate of 7.25 percent on the liquidation preference of $100.00 per share. If declared, these dividends will be paid in cash, or, subject to certain limitations, in shares of Virtus' common stock (or a combination) on February 1, May 1, August 1, and November 1 of each year, commencing May 1, 2017, and continuing to, and including, February 1, 2020.