By Abigail W. Adams
Portland, Me., June 10 – Altair Engineering Inc. priced $200 million of five-year convertible notes after the market close on Thursday at par with a coupon of 1.75% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the cheap end of talk for a coupon of 1.25% to 1.75% and at the rich end of talk for an initial conversion premium of 25% to 30%, according to a market source.
J.P. Morgan Securities LLC was bookrunner for the Rule 144A offering, which carries a greenshoe of $30 million.
The notes are non-callable until June 20, 2025 and then subject to a 130% hurdle.
There is takeover and dividend protection.
The notes will be settled in cash, shares or a combination of both at the company’s option.
Altair entered into privately negotiated transactions to repurchase $148.2 million in principal of its 0.25% convertible notes due 2024 for $192.4 million in cash.
Net proceeds are expected to be $194.6 million or will be $223.9 million if the greenshoe is exercised in full.
Approximately $192.4 million of proceeds will be used to fund the purchase of the 0.25% notes with the remainder to be used for other corporate purposes, which may include potential acquisitions or strategic transactions and the repurchase of common stock.
Altair is a Troy, Mich.-based artificial intelligence software company.
| Issuer: | Altair Engineering Inc.
|
| Amount: | $200 million
|
| Greenshoe: | $30 million
|
| Issue: | Convertible senior notes
|
| Maturity: | June 15, 2027
|
| Bookrunner: | J.P. Morgan Securities LLC
|
| Coupon: | 1.75%
|
| Price: | Par
|
| Yield: | 1.75%
|
| Conversion premium: | 30%
|
| Conversion price: | $71.68
|
| Conversion rate: | 13.9505
|
| Call options: | Non-callable until June 20, 2025 and then subject to a 130% hurdle
|
| Pricing date: | June 9
|
| Settlement date: | June 14
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 1.25% to 1.75% and initial conversion premium of 25% to 30%
|
| Stock symbol: | Nasdaq: ALTR
|
| Stock price: | $55.14 at market close June 10
|
| Market capitalization: | $4.4 billion
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