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Envestnet full greenshoe lifts 2.625% convertibles to $575 million
By Wendy Van Sickle
Columbus, Ohio, Nov. 17 – Underwriters for Envestnet Inc.’s five-year convertible notes fully exercised their $75 million greenshoe, increasing the total deal size to $575 million, according to an 8-K filing with the Securities and Exchange Commission.
The company priced the initial $500 million of the convertibles after the market close on Monday at par at the rich end of talk with a coupon of 2.625% and an initial conversion premium of 32.5%, as previously reported.
Price talk was for a coupon of 2.625% to 3.125% and an initial conversion premium of 27.5% to 32.5%.
Morgan Stanley & Co. LLC, BMO Capital Markets Corp., BofA Securities Inc. and J.P. Morgan Securities LLC were bookrunners for the Rule 144A offering.
The initial size of the offering was $350 million with a greenshoe of $52.5 million.
The notes are non-callable until Dec. 5, 2025 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
In connection with the offering, the company entered into capped call transactions with a cap price of $110.74, which represents a 100% premium over the stock reference price.
Simultaneously with the new offering, the company entered into privately negotiated transactions to repurchase for cash $300 million in principal of its 1.75% convertible notes due 2023 for $312.4 million plus accrued interest and $200 million in principal of its 0.75% convertible notes due 2025 for $181.8 million plus accrued interest.
Net proceeds will be $558.4 million with the greenshoe exercised in full.
About $69.1 million will be used to cover the cost of the call spread, $494.2 million of net proceeds plus available cash will be used for the convertible notes repurchases with the remaining amount to be used for general corporate purposes.
Envestnet is a Berwyn, Pa.-based financial technology company.
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