By Abigail W. Adams
Portland, Me., April 7 – Slack Technologies Inc. priced an upsized $750 million of five-year convertible notes after the market close on Monday at par with a coupon of 0.5% and an initial conversion premium of 27.5%, according to a company news release.
Pricing came on the rich end of talk for a coupon of 0.5% to 1% and at the midpoint of talk for an initial conversion premium of 25% to 30%, according to a market source.
Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC are the joint bookrunners for the Rule 144A deal, which carries an upsized greenshoe of $112.5 million.
The initial size of the offering was $600 million with a greenshoe of $90 million.
The notes are non-callable until April 20, 2023 and then subject to a 130% hurdle with a make-whole.
The notes are putable upon a fundamental change.
In connection with the pricing of the notes, Slack entered into capped call transactions with a cap price of $48.62 per share, which represents a premium of 100% over the last reported sales price of stock.
Proceeds are expected to be $731.4 million or $841.3 million if the greenshoe is exercised in full. Approximately $91.8 million of the proceeds will be used to cover the cost of the call spread, with an additional $13.8 million to be used if the greenshoe is exercised.
Remaining proceeds will be used for working capital and for general corporate purposes, which may include potential acquisitions and strategic transactions.
Slack is a San Francisco-based business communication software company.
| Issuer: | Slack Technologies Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $750 million
|
| Greenshoe: | $112.5 million
|
| Maturity: | April 15, 2025
|
| Bookrunners: | Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $31.00
|
| Conversion rate: | 32.2630
|
| Call options: | Non-callable until April 20, 2023 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | April 6
|
| Settlement date: | April 9
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.5% to 1% and initial conversion premium of 25% to 30%
|
| Stock symbol: | NYSE: WORK
|
| Stock price: | $24.31 at market close April 6
|
| Market capitalization: | $13.54 billion
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
