BeautyHealth greenshoe exercise lifts convertibles to $750 million

Chicago, Sept. 14 – Beauty Health Co. (BeautyHealth) announced that the initial purchasers exercised their option in full to purchase an additional $100 million of 1.25% convertible notes within 13 days of the original issue date, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

The exercise of the greenshoe increases the issue size to a total of $750 million.

As previously reported, the notes priced with an initial conversion premium of 32.5%.

J.P. Morgan Securities LLC and Cowen Inc. were bookrunners for the Rule 144A offering.

The offer had been upsized from $400 million with a greenshoe of $60 million.

The notes are non-callable until Oct. 6, 2024 and then subject to a 130% hurdle.

They are putable upon a fundamental change. There is dividend protection.

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

In connection with the offering, the company entered into capped call transactions with a cap price of $47.94, which represents a 100% premium over the last reported sales price of stock.

Net proceeds are $728.7 million as the greenshoe has been exercised in full.

Approximately $78.1 million of the net proceeds will be used to cover the cost of the call spread with the remaining amount to be used to fund potential acquisitions and for general corporate purposes.

BeautyHealth is a Long Beach, Calif.-based skin care solutions company.

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