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Axon greenshoe exercised, lifts 0.5% convertibles to $690 million
By Wendy Van Sickle
Columbus, Ohio, Dec. 9 – Underwriters for Axon Enterprise Inc.’s 0.5% convertible notes due Dec. 15, 2027 fully exercised their $90 million greenshoe, upping the total deal size to $690 million, according to an 8-K filing with the Securities and Exchange Commission.
The company priced an upsized $600 million of the convertibles with an initial conversion premium of 35% on Dec. 6, as previously reported.
Pricing came at the rich end of price talk for a coupon of 0.5% to 1% and richer than talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were bookrunners for the Rule 144A offering.
The initial size of the offering was $500 million with a greenshoe of $75 million.
The notes are non-callable until Dec. 22, 2025 and then subject to a 130% hurdle.
There is dividend and takeover protection.
The notes will be settled in cash up to the principal amount with the remaining amount to be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company entered into convertible note hedge and warrant transactions with a warrant strike price of $338.86, which represents a 100% premium over the last reported sales price of stock.
Net proceeds are expected to be $585.8 million.
Approximately $61.5 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 acquisitions or investments to support its growth.
Axon is a Scottsdale, Ariz.-based global public safety technology company.
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