Accolade greenshoe lifts five-year convertibles to $287.5 million

By Wendy Van Sickle

Columbus, Ohio, March 29 – Underwriters for Accolade Inc.’s 0.5% five-year convertible notes exercised their $37.5 million greenshoe, lifting the total deal size to $287.5 million, according to an 8-K filing with the Securities and Exchange Commission.

The company priced $250 million of the notes at par on March 24 with an initial conversion premium of 32.5%, as previously reported.

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%.

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.

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.

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.

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