By Abigail W. Adams
Portland, Me., March 25 – Accolade Inc. priced $250 million of five-year convertible notes after the market close on Wednesday at par with a coupon of 0.5% and an initial conversion premium of 32.5%, according to a company news release.
Pricing came at the cheap end of talk for a coupon of 0% to 0.5% and at the midpoint of talk for an initial conversion premium of 30% to 35%, according to a market source.
Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, BofA Securities Inc., Piper Sandler Co., Credit Suisse Securities (USA) LLC, William Blair & Co. LLC, SVB Leerink LLC and Academy Securities Inc. were bookrunners for the Rule the Rule 144A offering, which carries a greenshoe of $37.5 million.
The notes are non-callable until April 6, 2024 and then subject to a 130% hurdle.
They are putable upon a fundamental change. There is dividend protection.
The notes 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 $76.20, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $242.4 million or will be $278.9 million if the greenshoe is exercised in full.
Approximately $4.5 million of net proceeds will be used to cover the cost of the call spread with the remaining amount to be used for general corporate purposes, which may include capital expenditures, acquisitions and strategic investments.
Accolade is a Seattle-based health care technology company.
| Issuer: | Accolade Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $250 million
|
| Greenshoe: | $37.5 million
|
| Maturity: | April 1, 2026
|
| Bookrunners: | Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, BofA Securities Inc., Piper Sandler Co., Credit Suisse Securities (USA) LLC, William Blair & Co. LLC, SVB Leerink LLC and Academy Securities Inc.
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $50.48
|
| Conversion rate: | 19.8088
|
| Call options: | Non-callable until April 6, 2024 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | March 24
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| Settlement date: | March 29
|
| Distribution: | Rule 144A
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| Talk: | Coupon of 0% to 0.5% and initial conversion premium of 30% to 35%
|
| Stock symbol: | Nasdaq: ACCD
|
| Stock price: | $38.10 at market close March 24
|
| Market capitalization: | $2.1 billion
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