PetIQ talks $125 million six-year convertible notes to yield 3.5%-4%, up 25%-30%

By Abigail W. Adams

Portland, Me., May 14 – PetIQ, Inc. plans to sell $125 million of six-year convertible notes after the market close on Thursday with price talk for a coupon of 3.5% to 4% and an initial conversion premium of 25% to 30%, according to a market source.

Jefferies LLC is the active bookrunner for the Rule 144A offering, which carries a greenshoe of $18.75 million.

The notes are non-callable until June 1, 2023 and then subject to a 130% premium.

The convertibles will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, to fund the previously announced acquisition of the Capstar portfolio from Elanco Animal Health Inc. and for working capital and general corporate purposes.

PetIQ is an Eagle, Idaho-based pet medication and wellness company.

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