FTI Consulting to price $125 million seven-year convertibles, talked at 27.5%-32.5% premium

By Rebecca Melvin

Princeton, N.J., July 19 - FTI Consulting Inc. plans to price $125 million of seven-year convertible securities with an initial conversion premium of between 27.5% and 32.5%. No coupon price talk was yet available.

Goldman Sachs and Bank of America are joint bookrunners on the deal, which is expected to price after the markets close on July 28.

The seven-year convertible notes are part of a $300 million offering of long-term debt, with a concurrent offering of $175 million of senior notes due 2012.

There is a $25 million over-allotment option on the convertibles.

The notes also will be non-callable for life and will have no puts.

They will also have net share settlement plus contingent conversion. Dividend protection will be in the form of a conversion ratio adjustment if the company initiates a cash dividend.

The Annapolis, Md.-based management services company plans to use proceeds to repay existing term loan debt, repurchase outstanding common shares and for general corporate purposes, including potential acquisitions.

FTI also plans to use a portion of the net proceeds to repurchase at least $100 million of common shares in connection with the offerings through some combination of direct shares repurchased from original purchasers, an accelerated stock buyback program with the initial purchasers and open market purchases.

The settlement of any shares repurchased by the company in connection with the offering will be conditioned on the closing of the offering.

The company may also use a portion of the cash proceeds to enter into a convertible bond hedge and separate written call transactions with the initial purchasers to reduce potential dilution upon conversion of the convertible notes.

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