Verint greenshoe exercised, lifts 0.25% convertibles to $315 million

By Devika Patel

Knoxville, Tenn., April 9 – Underwriters for Verint Systems Inc.'s offering of 0.25% five-year convertible senior notes exercised their over-allotment option in full for $40 million more of the convertibles, increasing the size of the issue to $315 million, the company said in an 8-K filed with the Securities and Exchange Commission.

As previously reported, the company sold $275 million of the convertibles at par on April 7, in a Rule 144A offering, through joint bookrunners J.P. Morgan Securities LLC (lead left) and Goldman Sachs & Co. LLC.

The convertibles have an initial conversion premium of 32.5% and an initial conversion price of $62.08, which equals a conversion rate of 16.1092.

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.

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 common shares, repay amounts owed under interest rate swap agreements and to repay a portion of Verint’s 2017 term loan.

Verint Systems is a Melville, N.Y.-based analytics company.

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