Nutanix, Patrick, Genocea Biosciences to price new deals; Coupa, Exact Sciences quiet; Blackhawk active

By Abigail W. Adams

Portland, Me., Jan. 16 – While the secondary market got the week off to a slow start, the primary market was buzzing with new deals in the works.

Nutanix Inc. plans to price $400 million in five-year convertible notes after market close Wednesday.

Price talk is for a coupon of 0% to 0.5% and an initial conversion premium of 25% to 30%, according to a market source.

Bank of America Merrill Lynch and Morgan Stanley are bookrunners for the deal, which carries a greenshoe of $60 million.

Patrick Industries Inc. also plans to price $125 million in five-year convertible notes after the market close on Wednesday.

Price talk is for a coupon of 0.875% to 1.375% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

Bank of America Merrill Lynch and Wells Fargo are bookrunners for the deal, which carries a greenshoe of $18.75 million.

Genocea Biosciences, Inc. plans to price an offering of series A convertible preferred stock and class A warrants concurrent with an offering of common stock and class A warrants.

Cantor Fitzgerald & Co. is the sole bookrunner for the concurrent offerings.

Holders of the preferred stock are not entitled to receive dividends unless specifically declared by the board of directors, according to the preliminary prospectus.

While new deals are in the works, the existing convertible space was slow Tuesday. The frenzy of trading activity surrounding Coupa Software Inc.’s and Exact Sciences Corp.’s recently priced deals tapered off Tuesday.

The new deals dominated trading activity on their market debut Friday. However, on their second full trading day, the new paper accounted for only about $20 million of the $371.68 million in trading volume by dollar amount by late afternoon.

Blackhawk Network Holdings Inc.’s 1.5% convertible notes due 2022 dominated trading activity Tuesday. The 1.5% notes gained 6 points on an outright basis as its underlying equity soared after Silver Lake and P2 Capital Partners announced their acquisition of the company for $3.5 billion.

Last week’s deals

Coupa’s recently priced 0.375% convertible notes due 2023 continued to trade up on an outright basis but saw only a “very modest expansion” on a dollar-neutral basis, according to a market source.

The notes traded to a high of 104.982 on an outright basis early Tuesday before ending the day at 104, according to Trace data. Coupa stock closed Tuesday’s session at $34.45, an increase of 1.32%.

The 0.375% notes have only expanded by about 0.16 point on a dollar-neutral basis, a market source said.

Coupa priced $200 million of five-year convertible notes after the market close on Jan. 11 at the rich end of talk for a coupon of 0.375% to 0.875%. With an initial conversion premium of 32.5%, the deal priced richer than talk for a premium of 25% to 30%.

Exact Sciences’ recently priced 1% convertible notes due 2025 “did pretty well for such a large issuance,” a market source said.

The 1% convertible notes, which priced at 98.75 in a bought deal after market close Thursday, had solidified around 102 in trading on Tuesday. Exact Sciences’ stock ended the day at $52.95, an increase of 0.63%.

The $600 million deal with a $90 million greenshoe “is pretty meaningful” for the convertible space, which has seen a shortage of new paper, the source said.

The 1% convertible notes also priced late Thursday at 98.75 with a fixed coupon of 1% and fixed conversion premium of 37%. The issue price came at the middle of talk for a price of 98.5 to 99.

Blackhawk’s buy-out

Blackhawk’s 1.5% convertible notes due 2022 dominated trading activity on Tuesday as news of the Pleasanton, Calif.-based prepaid gift card company’s buyout spread.

The notes gained 6 points on an outright basis to solidify around 111 during active trading. Blackhawk stock soared on Tuesday, closing the day at $45.05, an increase of 23.42%.

Private equity firm Silver Lake and investment fund P2 Capital plan to take Blackhawk private. The buyout, which is expected to close mid-2018, is valued at $3.5 billion, which includes debt.

There is currently $500 million outstanding of the 1.5% notes. Holders have the right to force Blackhawk to redeem the notes at par plus accrued and unpaid interest upon a fundamental change.

Silver Lake and P2 Capital offered $45.25 per share to be settled in cash.

Mentioned in this article:

Blackhawk Network Holdings Inc. Nasdaq: HAWK

Coupa Software Inc. Nasdaq: COUP

Exact Sciences Corp. Nasdaq: EXAS

Genocea Biosciences, Inc. Nasdaq: GNCA

Nutanix Inc. Nasdaq: NTNX

Patrick Industries Inc. Nasdaq: PATK

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