By Rebecca Melvin
New York, June 10 – Avid Technology Inc. priced an upsized $125 million of five-year convertible senior notes at par after the market close on Tuesday to yield 2% with an initial conversion premium of 35%, according to a news release.
The Rule 144A deal was upsized from an initially talked $115 million in size. Pricing of the notes came at the midpoint of talk, which was for a 1.75% to 2.25% coupon and 32.5% to 37.5% premium.
There is a $15 million greenshoe, which was not upsized.
Jefferies & Co. was the bookrunner.
The notes are non-callable with no puts and have takeover and dividend protection.
In connection with the pricing of the notes, Avid entered into convertible note hedge and warrant transactions, or a capped call, with an affiliate of one of the initial purchasers of the notes. The cap price is $26.00 per share, which represents an initial conversion premium of 60% from the issuer’s perspective.
Proceeds from the notes will be used to fund its acquisition of Orad Hi-Tec Systems Ltd. and to pay the cost of the capped call.
Avid also plans to use remaining proceeds to pay for potential share repurchases, to use up to $18.4 million to repay borrowings under its senior secured revolving credit facilities with Wells Fargo Capital Finance LLC, and for working capital and general corporate purposes.
Burlington, Mass.-based Avid is a digital video and audio production technology, management and distribution company.
| Issuer: | Avid Technology Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $125 million, upsized from $115 million
|
| Greenshoe: | $15 million
|
| Maturity: | June 15, 2020
|
| Bookrunner: | Jefferies & Co.
|
| Co-manager: | Houlihan Lokey
|
| Coupon: | 2%
|
| Price: | Par
|
| Yield: | 2%
|
| Conversion premium: | 35%
|
| Conversion price: | $21.94
|
| Conversion ratio: | 45.5840 shares
|
| Call: | Non-callable
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Net share settlement: | Yes
|
| Contingent conversion: | Yes
|
| Capped call: | Yes, strike on the warrants is $26.00, which boosts the premium from issuer’s perspective to 60%
|
| Pricing date: | June 9
|
| Settlement date: | June 15
|
| Distribution: | Rule 144A
|
| Price talk: | 1.75%-2.25%, up 32.5%-37.5%
|
| Stock listing: | Nasdaq: AVID
|
| Stock reference price: | $16.25, as of close June 9
|
| Market capitalization: | $634.37 million
|
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