By Rebecca Melvin
New York, June 13 – Verint Systems Inc. priced an upsized $350 million of seven-year convertible notes late Thursday at par to yield 1.5% with an initial conversion premium of 35%, according to a term sheet.
The registered, off-the-shelf deal was initially talked at $300 million in size. Pricing came through the rich end of coupon talk, which was 1.75% to 2.25%, and at the rich end of 30% to 35% premium talk.
Verint also priced 5 million shares of common stock at $47.75 per share.
The notes deal has a $50 million greenshoe, which was upsized from $45 million.
Joint bookrunners were Deutsche Bank Securities Inc., Goldman Sachs & Co., Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC, Barclays, and HSBC Securities (USA) Inc.
The notes are non-callable. They are convertible if shares exceed 130% of the conversion price for a specified period, and they have takeover protection.
In connection with the notes offering, Verint entered into convertible note hedge and warrant transactions, or a call spread. The strike on the warrants is $75.00 per share, which boosts the initial conversion premium to 57% from the issuer’s perspective.
Proceeds of both the notes and stock offerings will be used to repay amounts outstanding under the company’s existing credit facility. Proceeds will also be used to fund the net cost of the call spread.
Melville, N.Y.-based Verint is a software and hardware analytics company, providing security, surveillance and business intelligence.
| Issuer: | Verint Systems Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $350 million, upsized from $300 million
|
| Greenshoe: | $50 million, upsized from $45 million
|
| Maturity: | June 1, 2021
|
| Bookrunners: | Deutsche Bank Securities Inc., Goldman Sachs & Co., Credit Suisse Securities (USA) LLC, RBC Capital Markets LLC, Barclays, and HSBC Securities (USA) Inc.
|
| Concurrent offering: | 5 million shares of common stock at $47.75 each
|
| Coupon: | 1.5%
|
| Price: | Par
|
| Yield: | 1.5%
|
| Conversion premium: | 35%
|
| Conversion price: | $64.46
|
| Conversion ratio: | 15.5129 shares
|
| Calls: | Non-callable
|
| Takeover protection: | Yes
|
| Call spread: | Yes, strike on warrants is $75.00, boosting the initial conversion premium from the issuer’s perspective to 57%
|
| Price talk: | 1.75%-2.25%, up 30%-35%
|
| Pricing date: | June 12
|
| Settlement date: | June 18
|
| Stock symbol: | Nasdaq: VRNT
|
| Stock reference price: | $47.75
|
| Stock price: | $48.28 as of close June 12
|
| Distribution: | Registered, off the shelf
|
| Market capitalization: | $2.62 billion
|
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