By Abigail W. Adams
Portland, Me., April 24 – Vertex Inc. priced an upsized $300 million of five-year convertible notes after the market close on Tuesday at par with a coupon of 0.75% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the rich end of talk for a coupon of 0.75% to 1.25% and the midpoint of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
Morgan Stanley & Co. LLC was bookrunner for the Rule 144A offering, which carries an upsized greenshoe of $45 million.
The initial size of the offering was $250 million with a greenshoe of $37.5 million.
The notes are non-callable until May 5, 2027 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
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 $55.88, which represents a premium of 100% over the last reported price of stock.
Net proceeds are expected to be $290 million assuming no exercise of the greenshoe.
Approximately $36.8 million of net proceeds will be used to cover the cost of the call spread with remaining amounts to be used for general corporate purposes, which may include acquisitions and strategic transactions.
Vertex is a King of Prussia, Pa.-based indirect tax solutions company.
| Issuer: | Vertex Inc.
|
| Amount: | $300 million
|
| Greenshoe: | $45 million
|
| Issue: | Convertible senior notes
|
| Maturity: | May 1, 2029
|
| Bookrunner: | Morgan Stanley & Co. LLC
|
| Coupon: | 0.75%
|
| Price: | Par
|
| Yield: | 0.75%
|
| Conversion premium: | 30%
|
| Conversion price: | $36.32
|
| Conversion rate: | 27.5315
|
| Call options: | Non-callable until May 5, 2027 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | April 23
|
| Settlement date: | April 26
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.75% to 1.25% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: VERX
|
| Stock price: | $27.94 at market close April 23
|
| Market capitalization: | $4.31 billion
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