By Abigail W. Adams
Portland, Me., Dec. 7 – Axon Enterprise Inc. priced an upsized $600 million of five-year convertible notes after the market close on Tuesday at par with a coupon of 0.5% and an initial conversion premium of 35%, according to a company news release.
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, which carries an upsized greenshoe of $90 million.
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 or will be $673.8 million if the greenshoe is exercised in full.
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.
| Issuer: | Axon Enterprise Inc.
|
| Amount: | $600 million
|
| Greenshoe: | $90 million
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| Issue: | Convertible senior notes
|
| Maturity: | Dec. 15, 2027
|
| Bookrunners: | Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Conversion premium: | 35%
|
| Conversion price: | $228.73
|
| Conversion rate: | 4.3720
|
| Call options: | Non-callable until Dec. 22, 2025 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
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| Pricing date: | Dec. 6
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| Settlement date: | Dec. 9
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0.5% to 1% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: AXON
|
| Stock price: | $169.43 at market close Dec. 6
|
| Market capitalization: | $13.10 billion
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