By Abigail W. Adams
Portland, Me., June 18 – Rimini Street, Inc. priced $140 million, or 140,000 shares, of series A convertible preferred stock after the market close Monday with an issue price of 95, a dividend of 13% and an initial conversion premium of 72%, according to an 8K filing with the Securities and Exchange Commission.
Cowen Group Inc. served as financial adviser and placement agent for the private placement, which is subject to shareholder approval, according to a company news release. The deal is expected to close in the third quarter.
The syndicate of investors, which includes Rimini’s largest shareholder, Adams Street Partners, will receive 2,896,556 million common shares alongside the convertible preferred stock, according to the 8K filing.
Holders of the series A convertible preferred stock will receive a cash dividend of 10%, payable quarterly, and a payment-in-kind dividend of 3% per year.
The dividend will switch to 13% to be paid in cash after five years, according to the filing.
The company has the right to force conversion of the preferred stock after three years subject to a 150% hurdle. Prior to the three-year point, the company has the right to redeem up to $80 million shares of the preferred stock with a make-whole.
The notes may be redeemed at 105% of the principal amount in the event of a fundamental change.
The preferred stock will become mandatorily redeemable on or after the fifth anniversary of the closing date of the offering at the election of the holders of the majority of the preferred stock outstanding.
The notes are also puttable at the election of holders of the majority of the preferred stock outstanding upon the occurrence of a material adverse effect or material litigation effect, according to the 8-K filing.
Proceeds will be used to repay the full outstanding amount under the company’s credit facility.
Rimini Street is a Las Vegas-based enterprise software products and services company.
| Issuer: | Rimini Street, Inc.
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| Securities: | Series A convertible preferred stock
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| Amount: | $140 million, or 140,000 shares
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| Placement agent: | Cowen Group Inc.
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| Dividend: | 10% cash dividend, 3% PIK dividend
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| Price: | Par
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| Conversion premium: | 72%
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| Conversion price: | $10
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| Call options: | Callable with make-whole for three-years then subject to 150% hurdle
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| Put options: | Upon certain corporate events
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| Pricing date: | June 18
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| Stock symbol: | Nasdaq: RMNI
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| Stock price: | $5.57 at market close June 18
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| Market capitalization: | $342.10 million
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