By Abigail W. Adams
Portland, Me., April 7 – Verint Systems Inc. priced an upsized $275 million of five-year convertible notes after the market close on Tuesday at par at the midpoint of talk with a coupon of 0.25% and an initial conversion premium of 32.5%, according to a company news release.
Price talk was for a coupon of 0% to 0.5% and an initial conversion premium of 30% to 35%, according to a market source.
J.P. Morgan Securities LLC (lead left) and Goldman Sachs & Co. LLC are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $40 million.
The initial size of the offering was $250 million with a greenshoe of $37.5 million.
The notes are non-callable for three years and then subject to a 130% hurdle.
There is takeover and dividend protection.
The notes will be settled in cash up to the principal amount with the remainder to be settled in cash, shares or a combination of both at the company’s option.
Upon conversion, the company intends to settle the remainder in shares.
In connection with the offering, the company entered into capped call transactions with a cap price of $100, which represents a premium of 113% over the last reported sales price of stock.
Net proceeds are expected to be $267 million assuming no exercise of the greenshoe.
Concurrently, Verint Systems issued $200 million of its series B convertible preferred stock to an affiliate of Apax Partners.
Proceeds will be used to cover the cost of the call spread, and, together with proceeds from the preferred stock issuance, will be used to repurchase 1.06 million shares of common stock, to repay amounts owed under interest rate swap agreements and to repay a portion of its 2017 term loan.
Verint Systems is a Melville, N.Y.-based analytics company.
| Issuer: | Verint Systems Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $275 million
|
| Greenshoe: | $40 million
|
| Maturity: | April 15, 2026
|
| Bookrunners: | J.P. Morgan Securities LLC (lead left) and Goldman Sachs & Co. LLC
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $62.08
|
| Conversion rate: | 16.1092
|
| Call options: | Non-callable for three years and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | April 7
|
| Settlement date: | April 9
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0% to 0.5% and an initial conversion premium of 30% to 35%
|
| Stock symbol: | Nasdaq: VRNT
|
| Stock price: | $46.85 at market close April 7
|
| Market capitalization: | $3.08 billion
|
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