Freshpet greenshoe exercised, ups 3% convertibles to $402.5 million

By Wendy Van Sickle

Columbus, Ohio, March 20 – Underwriters for Freshpet Inc.’s 3% convertible notes due April 1, 2028 fully exercised their $52.5 million greenshoe, increasing the total size of the deal to $402.5 million, according to a company news release.

The company priced the initial $350 million of the convertibles on March 15 at par at the cheap end of talk with a coupon of 3% and an initial conversion premium of 27.5%, as previously reported.

Price talk was for a coupon of 2.5% to 3% and an initial conversion premium of 27.5% to 32.5%.

BofA Securities Inc. and Goldman Sachs & Co. LLC were bookrunners for the Rule 144A offering.

The notes are non-callable until April 3, 2026 and then subject to a 130% hurdle.

They are putable upon a fundamental change.

In connection with the offering, the company entered into capped call transactions with a cap price of $120.23, which represents a premium of 120% over the last reported price of the company’s stock.

Net proceeds will be $391.4 million with the full exercise of the greenshoe.

Approximately $57.6 million of net proceeds will be used to cover the cost of the call spread and for general corporate purposes.

Freshpet is a Secaucus, N.J.-based pet food company.

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