By Abigail W. Adams
Portland, Me., Dec. 15 – TechTarget Inc. priced $175 million of five-year convertible notes after the market close on Monday at par with a coupon of 0.125% and an initial conversion premium of 40%, according to a company news release.
Pricing came at the rich end of initial price talk for a coupon of 0.125% to 0.625% and at the rich end of revised talk for an initial conversion premium of 35% to 40%, according to a market source.
Initial talk was for a conversion premium of 30% to 35%.
J.P. Morgan Securities LLC and Deutsche Bank Securities Inc. were joint bookrunners for the Rule 144A offering, which carries a greenshoe of $26.25 million.
The notes are contingently convertible until Sept. 15, 2025.
They are non-callable until Dec. 20, 2023 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
The notes will be settled in cash, shares or a combination of both at the company’s option.
Net proceeds are expected to be $169.1 million or will be $194.6 million if the greenshoe is exercised in full.
Approximately $150 million of net proceeds will be used to fund the cash consideration portion of its acquisition of BrightTalk Ltd. An additional $20 million will be used for the potential acquisition of a B2B information technology research and content company with which TechTarget has a non-binding letter of intent.
If the acquisitions are not consummated, proceeds will be used for general corporate purposes.
TechTarget is a Newton, Mass-based marketing and sales and service provider for tech companies.
| Issuer: | TechTarget Inc.
|
| Securities: | Convertible senior notes
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| Amount: | $175 million
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| Greenshoe: | $26.25 million
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| Maturity: | Dec. 15, 2025
|
| Bookrunners: | J.P. Morgan Securities LLC and Deutsche Bank Securities Inc.
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| Coupon: | 0.125%
|
| Price: | Par
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| Yield: | 0.125%
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| Conversion premium: | 40%
|
| Conversion price: | $70.43
|
| Conversion rate: | 14.1977
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| Call options: | Non-callable until Dec. 20, 2023 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
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| Pricing date: | Dec. 14
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| Settlement date: | Dec. 17
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0.125% to 0.625%; revised talk for initial conversion premium of 35% to 40%; initial talk for initial conversion premium of 30% to 35%
|
| Stock symbol: | Nasdaq: TTGT
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| Stock price: | $50.31 at market close Dec. 14
|
| Market capitalization: | $1.41 billion
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