Performant Financial withdraws convertible bond, stock offerings

By Rebecca Melvin

New York, Jan. 30 – Performant Financial Corp. has decided to withdraw its planned $80 million of five-year convertible bonds and a concurrent offering of $50 million of common stock, according to a company news release.

Proceeds of the offerings were to have been used to fund the company’s acquisition of Premier Healthcare Exchange Inc., or if the acquisition is not completed, to repay debt under the company’s senior secured credit facility.

Performant chief executive officer Lisa Im said in the release, “We continue to believe that Premiere Healthcare Exchange is an exceptional company, the acquisition has very compelling merits, and fits within our strategy of growing in health care technology. However, we are not going forward with the previously announced capital raise at levels that are not in the best interests of our stockholders.”

Performant shares plunged 28% on Thursday after the offerings were launched.

The convertibles had been talked to yield 4.75% to 5.25% with an initial conversion premium of 17.5% to 22.5% and were to have been sold via joint bookrunners Morgan Stanley & Co. LLC and SunTrust Robinson Humphrey Inc.

The Livermore, Calif.-based company is a provider of technology to help identify and recover delinquent or defaulted assets and improper payments.

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