PetIQ greenshoe lifts 4% six-year convertibles to $143.75 million

By Wendy Van Sickle

Columbus, Ohio, May 20 – Underwriters for PetIQ Inc.’s 4% six-year convertible notes fully exercised their $18.75 million greenshoe on Monday, increasing the total size of the deal to $143.75 million, according to an 8-K filing with the Securities and Exchange Commission.

The company priced $125 million of the convertibles after the market close on Thursday at par at the cheap end of talk with an initial conversion premium of 25%, as previously reported.

Price talk was for a coupon of 3.5% to 4% and an initial conversion premium of 25% to 30%, according to a market source.

Jefferies LLC was the active bookrunner for the Rule 144A offering.

The notes are contingently convertible until Jan. 15, 2026.

The convertibles are non-callable until June 1, 2023 and then subject to a 130% premium. They are putable upon a fundamental change.

The convertibles will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company entered into capped call transactions with a cap price of $41.51, which represents a premium of 75% over the last reported sales price of stock.

Proceeds are expected to $138.1 million with the greenshoe is exercised in full.

About $12.9 million of the proceeds will be used to cover the cost of the call spread with the remaining amount to be used to fund the previously announced acquisition of the Capstar portfolio from Elanco Animal Health Inc. and for working capital and general corporate purposes.

PetIQ is an Eagle, Idaho-based pet medication and wellness company.

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