By Abigail W. Adams
Portland, Me., Feb. 3 – Mitek Systems Inc. priced an upsized $135 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 37.5%, according to a company news release.
Pricing came at the rich end of initial price talk for a coupon of 0.75% to 1.25% and richer than initial talk for a conversion premium of 30% to 35%, according to a market source.
Jefferies LLC and William Blair & Co. LLC are joint bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $20.25 million.
The initial size of the offering was $125 million with a greenshoe of $18.75 million.
The notes are non-callable. They are putable upon a fundamental change.
They will be settled in cash, or cash and shares at the company’s option if it receives shareholder approval to increase the number of authorized shares of common stock, according to a company news release.
In connection with the offering, the company will enter into convertible note hedge and warrant transactions.
The strike price on the warrant transactions is $26.53, which represents a premium of 75% over the last reported sales price of stock.
Net proceeds are expected to be $130.3 million or will be $149.9 million if the greenshoe is exercised in full.
Approximately $8.1 million, or $9.3 million if the greenshoe is exercised in full, will be used to cover the cost of the warrant transactions.
Remaining proceeds will be used for general corporate purposes, which may include potential acquisitions and strategic transactions.
Mitek is a San Diego-based identity verifications solutions company.
| Issuer: | Mitek Systems Inc.
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| Securities: | Convertible senior notes
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| Amount: | $135 million
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| Greenshoe: | $20.25 million
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| Maturity: | Feb 1. 2026
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| Bookrunners: | Jefferies LLC and William Blair & Co. LLC
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| Coupon: | 0.75%
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| Price: | Par
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| Yield: | 0.75%
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| Conversion premium: | 37.5%
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| Conversion price: | $20.85
|
| Conversion rate: | 47.9731
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| Call options: | Non-callable
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| Put options: | Upon a fundamental change
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| Pricing date: | Feb. 2
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| Settlement date: | Feb. 5
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0.75% to 1.25% and richer than initial talk for a conversion premium of 30% to 35%
|
| Stock symbol: | Nasdaq: MITK
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| Stock price: | $15.86 at market close Feb. 2
|
| Market capitalization: | $646.85 million
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