By Abigail W. Adams
Portland, Me., March 21 – Apptio Inc. priced $125 million in five-year convertible notes after the market close Tuesday with a coupon of 0.875% and an initial conversion premium of 30%.
Pricing came at the rich end of talk for a coupon of 0.875% to 1.375% and at the mid-point of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
Goldman Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc. and Barclays are lead bookrunners for the Rule 144A deal, which carries a greenshoe of $18.75 million.
Jefferies & Co., RBC Capital Markets Corp. and BofA Merrill Lynch are passive bookrunners.
The notes are non-callable for three-years and then subject to a 130% hurdle with a make-whole. There is takeover protection.
Conversion will be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing, Apptio will enter into capped call transactions. The cap price on the capped call transaction is $60.44, which represents a premium of 100% from the company’s perspective, according to a company news release.
Proceeds are expected to be $120.7 million. Up to $14.9 million will be used to cover the cost of the call spread.
The remaining amount will be used for general corporate purposes, which may include potential acquisitions and strategic transactions.
Apptio is a Bellevue, Wash.-based technology business management software company.
| Issuer: | Apptio Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $125 million
|
| Greenshoe: | $18.75 million
|
| Maturity: | April 1, 2023
|
| Bookrunners: | Goldman Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc., Barclays (leads), Jefferies & Co., RBC Capital Markets Corp. and BofA Merrill Lynch
|
| Co-manager: | KeyBanc Capital Markets Inc.
|
| Coupon: | 0.875%
|
| Price: | Par
|
| Conversion premium: | 30%
|
| Conversion price: | $39.29
|
| Conversion rate: | 25.4544
|
| Call options: | Non-callable for three years then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | March 20
|
| Settlement date: | March 23
|
| Talk: | Coupon of 0.875% to 1.375% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: APTI
|
| Stock price: | $30.22 at the market close March 20
|
| Market capitalization: | $1.288 billion
|
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