By Abigail W. Adams
Portland, Me., April 9 – Health Catalyst Inc. priced an upsized $200 million of five-year convertible notes after the market close on Wednesday at par at the rich end of talk with a coupon of 2.5% and an initial conversion premium of 27.5%, according to a company news release.
Price talk was for a coupon of 2.5% to 3% and an initial conversion premium of 22.5% to 27.5%, according to a market source.
J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are joint bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $30 million.
The initial size of the deal was $175 million with a greenshoe of $26.25 million.
The notes are non-callable until April 20, 2023 and then subject to a 130% hurdle with a make-whole.
The convertibles are putable upon a change of control. There is dividend protection.
The notes are contingently convertible until Oct. 15, 2024.
In connection with the pricing of the notes, the company entered into capped call transactions with a cap price of $42, representing a 75% premium over the last reported sales price of stock.
Net proceeds will be $193.2 million or $222.3 million if the greenshoe is exercised in full.
Approximately $18.8 million of proceeds will be used to cover the cost of the call spread, approximately $57 million will be used to repay and terminate the company’s term loan facility with the remaining amount to be used for working capital and general corporate purposes, which may include potential acquisitions and strategic transactions.
If the greenshoe is exercised in full, the company will use $2.8 million to enter into additional capped call transactions.
Health Catalyst is a Salt Lake City-based provider of data and analytics technology.
| Issuer: | Health Catalyst Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $200 million
|
| Greenshoe: | $30 million
|
| Maturity: | April 15, 2025
|
| Bookrunners: | J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC
|
| Coupon: | 2.5%
|
| Price: | Par
|
| Yield: | 2.5%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $30.60
|
| Conversion rate: | 32.6797
|
| Call options: | Non-callable until April 20, 2023 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | April 8
|
| Settlement date: | April 14
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 2.5% to 3% and initial conversion premium of 22.5% to 27.5%
|
| Stock symbol: | Nasdaq: HCAT
|
| Stock price: | $24.00 at market close April 8
|
| Market capitalization: | $894.17 million
|
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