By E. Janene Geiss
Philadelphia, Feb. 12 - Flotek Industries Inc. priced $100 million in convertible senior notes due Feb. 15, 2028 on Monday after the market close to yield 5.25% with a 30% initial conversion premium.
The deal came in cheaper than talk which put the coupon at 3.75% to 4.25% and the conversion premium at 35% to 40%.
Bear Stearns is the bookrunner on the Securities and Exchange Commission registered transaction.
There is a $15 million over-allotment option.
Flotek can call the convertibles beginning Feb. 15, 2013. They are puttable on Feb. 15 in each of 2013, 2018 and 2023.
The conversion price is $22.75 per share, representing a conversion rate of 43.9560 shares per par, or 30% over the $17.50 price of the concurrent stock offering. The stock's closing price on Feb. 11 was $17.71. Conversions are subject to a contingent conversion test with a 120% hurdle.
There is a contingent interest payment of 50 basis points subject to a 120% hurdle beginning Feb. 15, 2013.
The notes have takeover protection through a conversion rate adjustment up to Feb. 15, 2013 and net share settlement.
At the same time, Flotek will also issue up to 3.8 million shares of common stock, which will be lent to an affiliate of Bear Stearns. Flotek will receive no cash from the sale of the common stock offering.
Flotek is a Houston-based oil and gas driller. The company plans to use the proceeds to purchase wireless survey and measurement tools maker Teledrift Inc. and for general corporate purposes.
Issuer: Flotek Industries Inc.
Issue: Convertible senior notes
| Amount: | $100 million
|
| Greenshoe: | $15 million
|
| Maturity: | Feb. 15, 2028
|
| Coupon: | 5.25%
|
| Price: | Par
|
| Yield: | 5.25%
|
| Conversion premium: | 30%
|
| Conversion price: | $22.75
|
| Conversion ratio: | 43.9560
|
| Call: | Beginning Feb. 15, 2013 at par
|
| Put: | Feb. 15, 2013, Feb. 15, 2018, Feb. 15, 2023
|
| Contingent interest: | 50 bps subject to 120% hurdle
|
| Contingent conversion: | 120%
|
| Bookrunner: | Bear Stearns
|
| Distribution: | Off shelf
|
| Pricing date: | Feb. 11
|
| Settlement date: | Feb. 14
|
| Talk: | 3.75% - 4.25% talk, 35% to 40% conversion premium
|
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