By Abigail W. Adams
Portland, Me., Nov. 17 – Unity Software Inc. priced $1.5 billion five-year convertible notes after the market close on Tuesday at par with a coupon of 0% and an initial conversion premium of 57.5%, according to a press release.
Pricing came at the rich end of initial talk for a coupon of 0% to 0.25% and richer than initial talk for an initial conversion premium of 47.5% to 52.5%.
Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC were bookrunners for the Rule 144A deal, which carries a greenshoe of $225 million.
The notes are non-callable until Nov. 20, 2024 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
The notes may 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 $343.02, which represents a premium of 75% over the last reported sales price of stock.
Net proceeds are expected to be $1.48 billion or will be $1.7 billion if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the call spread, for general corporate purposes and for acquisitions or strategic investments in complementary businesses or technologies.
Unity is a San Francisco-based platform for creating and operating 3D content.
| Issuer: | Unity Software Inc.
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| Securities: | Convertible senior notes
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| Amount: | $1.5 billion
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| Greenshoe: | $225 million
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| Maturity: | Nov. 15, 2026
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| Bookrunners: | Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC
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| Coupon: | 0%
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| Price: | Par
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| Yield: | 0%
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| Conversion premium: | 57.5%
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| Conversion price: | $308.72
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| Conversion rate: | 3.2392
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| Call options: | Non-callable until Nov. 20, 2024 and then subject to a 130% hurdle
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| Put options: | Upon a fundamental change
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| Pricing date: | Nov. 16
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| Settlement date: | Nov. 19
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0% to 0.25% and initial conversion premium of 47.5% to 52.5%
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| Stock symbol: | NYSE: U
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| Stock price: | $196.01
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| Market capitalization: | $56.06 billion
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