CalAmp greenshoe ups 2% seven-year convertible notes to $230 million

By Sarah Lizee

Olympia, Wash., July 20 – CalAmp Corp. said underwriters for its seven-year convertible notes exercised their over-allotment option in full on Thursday, adding an additional $30 million and bringing the total deal size to $230 million, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, the company priced $200 million of the convertible notes after the market close on Tuesday at the cheap end of talk with a coupon of 2% and an initial conversion premium of 30%, according to a company news release.

Price talk had been for a coupon of 1.5% to 2% and an initial conversion premium of 30% to 35%, according to a market source.

Goldman Sachs & Co. and Jefferies & Co. were joint bookrunners for the Rule 144A deal.

The notes are contingently convertible until Feb. 1, 2025. Holders may require CalAmp to repurchase the notes upon a fundamental change.

The notes may be settled in cash, shares or a combination of both at the company’s option.

In connection with the pricing, CalAmp entered into capped call transactions with a cap price of $41.39, representing a premium of 75%.

About $18.4 million of the proceeds will be used to cover the cost of the call spread, $15 million will be used for the repurchase of common stock and $50 million will be used to repurchase a portion of the company’s outstanding 1.625% convertible notes due 2020 in privately negotiated transactions, which currently have $172.5 million outstanding.

The remaining amount will be used for general corporate purposes, which may include the repurchase of additional shares or 2020 notes or the acquisition of complementary businesses, products, services or technologies.

CalAmp is an Irvine, Calif.-based technology solutions provider focused on streamlining internet of things deployments.

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