By Abigail W. Adams
Portland, Me., June 6 – Altair Engineering Inc. priced an upsized $200 million of five-year convertible notes after the market close on Wednesday at par with a coupon of 0.25% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the midpoint of talk for a coupon of 0.125% to 0.375% and an initial conversion premium of 27.5% to 32.5%, according to a market source.
J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and RBC Capital Markets, LLC are joint bookrunners for the registered offering, which carries an upsized greenshoe of $30 million.
The initial size of the deal was $175 million with a greenshoe of $26.25 million.
The notes are non-callable until June 6, 2022 and then subject to a 130% hurdle. They are putable upon a fundamental change.
The notes are contingently convertible until Dec. 1, 2023 subject to a 130% trigger.
Net proceeds are expected to be $192.8 million, or $221.9 million if the greenshoe is exercised in full.
Proceeds will be used to repay outstanding debt under its revolving credit facility, which had $14.8 million outstanding as of March 31, 2019.
Remaining proceeds will be used for acquisitions or investments in complementary businesses, general corporate purposes, including building an addition to its corporate headquarters, and sales and marketing activity.
Altair Engineering is a Troy, Mich.-based global technology company providing software and cloud solutions.
| Issuer: | Altair Engineering Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $200 million
|
| Greenshoe: | $30 million
|
| Maturity: | June 1, 2024
|
| Bookrunners: | J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and RBC Capital Markets, LLC
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 30%
|
| Conversion price: | $46.50
|
| Conversion rate: | 21.5049
|
| Call options: | Non-callable until June 6, 2022 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | June 5
|
| Settlement date: | June 10
|
| Distribution: | Registered
|
| Talk: | Coupon of 0.125% to 0.375% and an initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: ALTR
|
| Stock price: | $35.77 at market close June 6
|
| Market capitalization: | $2.55 billion
|
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