Target Hospitality stock falls on secondary offering pricing

Target Hospitality Corp. (NASDAQ:TH) stock declined 7.9% in premarket trading Wednesday following the pricing of an upsized secondary offering by existing shareholders.

The company revealed the pricing of an underwritten secondary offering of 14,000,000 common shares at $18.50 per share. The shares are being sold by Arrow Holdings S.à r.l. and MFA Global S.à r.l., entities controlled by TDR Capital LLP. The selling stockholders will receive approximately $259,000,000 in gross proceeds, before underwriting discounts and commissions.

Target Hospitality will not receive any proceeds from the offering. However, the company has agreed to purchase approximately $30,000,000 worth of shares from the underwriters at the same price paid by the selling stockholders. The repurchased shares will be held as treasury stock.

The offering is expected to close on September 10, 2026, subject to customary closing conditions. The selling stockholders have granted the underwriters a 30-day option to buy up to an additional 2,100,000 shares.

Target Hospitality intends to finance the share repurchase using cash on hand along with borrowings under its ABL Credit Facility.

Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are serving as book-running managers for the offering, with Northland Securities, Inc., Oppenheimer & Co. Inc. and Texas Capital Securities acting as co-managers.

Target Hospitality is one of North America’s largest providers of vertically integrated modular accommodations and value-added hospitality services.

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