Q2 Holdings, Inc. Announces Pricing of Private Offering of $200 Million of Convertible Senior Notes Due 2023
22 Febbraio 2018 - 1:30PM
Business Wire
Q2 Holdings, Inc. (NYSE: QTWO) (the “Company”), a provider of
secure, cloud-based virtual banking solutions, today announced the
pricing of its $200 million aggregate principal amount of
convertible senior notes due 2023 (the “Convertible Notes”). The
Convertible Notes are being offered in a private placement to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). The
Company granted an option to the initial purchasers to purchase up
to an additional $30 million aggregate principal amount of
Convertible Notes.
The Convertible Notes will be unsecured, unsubordinated
obligations of the Company and will pay interest semiannually at an
annual rate of 0.75% and will be convertible into cash, shares of
the Company’s common stock or a combination of cash and shares of
the Company’s common stock, at the Company’s election, based on the
applicable conversion rate at such time. The Convertible Notes have
an initial conversion rate of 17.4292 shares of the Company’s
common stock per $1,000 principal amount of Convertible Notes
(which is equivalent to an initial conversion price of
approximately $57.38 per share of the Company’s common stock),
representing an initial conversion premium of approximately 27.5%
above the closing price of $45.00 per share of the Company’s common
stock on Feb. 21, 2018. The conversion rate is subject to
adjustment in some events but will not be adjusted for any accrued
and unpaid interest. Holders of the Convertible Notes will have the
right to require the Company to repurchase all or a portion of
their notes upon the occurrence of a fundamental change (as defined
in the indenture governing the Convertible Notes) at a purchase
price of 100% of their principal amount plus any accrued and unpaid
interest. The Convertible Notes will mature on Feb. 15, 2023,
unless repurchased or converted in accordance with their terms
prior to such date. Prior to the close of business on the business
day immediately preceding Nov. 15, 2022, the Convertible Notes will
be convertible only upon the satisfaction of certain conditions and
during certain periods, and thereafter, at any time prior to the
close of business on the second scheduled trading day immediately
preceding the maturity date regardless of these conditions. The
Company expects to close the offering on or about Feb. 26, 2018,
subject to the satisfaction of various customary closing
conditions.
In connection with the offering, the Company entered into
privately negotiated convertible note hedge transactions with one
or more financial institutions, which included one or more of the
initial purchasers and/or their respective affiliates (in this
capacity, the “option counterparties”). The convertible note hedge
transactions cover, subject to anti-dilution adjustments, the
number of shares of common stock underlying the Convertible Notes
sold in the offering. The Company also entered into privately
negotiated warrant transactions with the option counterparties
whereby the Company sold to the option counterparties warrants to
purchase up to the same number of shares of the Company’s common
stock, subject to customary anti-dilution adjustments, with an
initial strike price of approximately $78.75 per share, subject to
certain adjustments, which is 75% higher than the closing price of
the Company’s common stock on Feb. 21, 2018. The warrants evidenced
by the warrant transactions will be settled on a net share basis
unless the Company elects cash settlement. If the initial
purchasers exercise their option to purchase additional notes, the
Company may enter into additional convertible note hedge
transactions and additional warrant transactions with the option
counterparties. The convertible note hedge transactions are
generally expected to reduce potential dilution to the Company’s
common stock upon conversion of the Convertible Notes and/or offset
any cash payments the Company is required to make in excess of the
principal amount of converted notes, as the case may be. The
warrant transactions will have a dilutive effect on the Company’s
common stock to the extent that the market price per share of the
Company’s common stock exceeds the strike price of the warrants
unless the Company elects to cash settle the warrants.
The Company estimates that it will receive net proceeds from the
offering of approximately $193.8 million (or approximately $223
million if the initial purchasers exercise their option to purchase
additional notes in full). The Company intends to use $16.8 million
of the net proceeds of the offering to pay the cost of the
convertible note hedge transactions (after such cost is partially
offset by the proceeds that it receives from the sale of warrants
pursuant to the warrant transactions). The Company intends to use
the remainder of the net proceeds from the offering for general
corporate purposes, including working capital, capital
expenditures, potential acquisitions and strategic transactions;
however, the Company has not designated any specific uses and has
no current agreements with respects to any material acquisition or
strategic transactions. If the initial purchasers exercise their
option to purchase additional notes, the Company intends to use a
portion of the net proceeds to fund the cost of entering into
additional convertible note hedge transactions. Any remaining net
proceeds from the sale of additional notes will be used for general
corporate purposes.
The Company has been advised that, in connection with
establishing their initial hedge positions with respect to the
convertible note hedge transactions and the warrant transactions,
the option counterparties and/or their affiliates (i) expect to
purchase shares of the Company’s common stock and/or enter into
derivative transactions with respect to the Company’s common stock
concurrently with, or shortly after, the pricing of the Convertible
Notes and (ii) may modify their hedge positions by entering into or
unwinding derivative transactions with respect to the Company’s
common stock and/or purchasing or selling the Company’s common
stock or other securities of the Company in secondary market
transactions following the pricing of the Convertible Notes and
prior to the maturity of the Convertible Notes. These activities
could have the effect of increasing, or preventing a decline in,
the market price of the Company’s common stock concurrently with,
or shortly following, the pricing of the Convertible Notes. The
effect, if any, of these activities, including the direction or
magnitude, on the market price of the Company’s common stock will
depend on a variety of factors, including market conditions, and
cannot be ascertained at this time. Any of these activities could,
however, adversely affect the market price of the Company’s common
stock.
This press release is neither an offer to sell nor a
solicitation of an offer to buy the Convertible Notes or the shares
of common stock issuable upon conversion of the Convertible Notes,
if any, nor shall there be any sale of these securities in any
state or jurisdiction in which such an offer, solicitation or sale
would be unlawful prior to the registration or qualification under
the securities laws of any such state or jurisdiction. Any offer of
these securities will be made only by means of a private offering
memorandum.
The Convertible Notes and the shares of common stock issuable
upon conversion of the Convertible Notes, if any, have not been
registered under the Securities Act, or the securities laws of any
other jurisdiction, and may not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements.
Forward-looking Statements:
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995
regarding the planned offering. Words such as “anticipates,”
“estimates,” “expects,” “projects,” “forecasts,” “intends,”
“plans,” “will,” “believes” and words and terms of similar
substance used in connection with any discussion identify
forward-looking statements. These forward-looking statements are
based on management’s current expectations and beliefs about future
events and are inherently susceptible to uncertainty and changes in
circumstances. Except as required by law, the Company is under no
obligation to, and expressly disclaim any obligation to, update or
alter any forward-looking statements whether as a result of such
changes, new information, subsequent events or otherwise. With
respect to the planned offering, such uncertainties and
circumstances include whether the Company will consummate the
offering on the anticipated terms of the notes, if at all, and the
use of the net proceeds from the offering; and whether the
convertible note hedge and warrant transactions will become
effective. Various factors could also adversely affect the
Company’s operations, business or financial results in the future
and cause the Company’s actual results to differ materially from
those contained in the forward-looking statements, including those
factors discussed in detail in the “Risk Factors” sections
contained in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2017 filed with the Securities and Exchange
Commission and available on the SEC Filings section of the Investor
Relations section of Q2’s website
at http://investors.q2ebanking.com/.
About Q2 Holdings, Inc.
Q2 is a leading provider of secure, experience-driven digital
banking solutions headquartered in Austin, Texas. We are driven by
a mission to build stronger communities by strengthening their
financial institutions. Q2 provides the industry’s most
comprehensive digital banking platform, enriched through actionable
data insights, open development tools and an evolving fintech
ecosystem. We help clients elevate the experience, drive efficiency
and grow faster.
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version on businesswire.com: http://www.businesswire.com/news/home/20180222005652/en/
Media Contact:Red Fan CommunicationsEmma Chase, 512-551-9253C:
512-917-4319emma@redfancommunications.comorInvestor Contact:Q2
Holdings, Inc.Bob Gujavarty,
512-439-3447bobby.gujavarty@q2ebanking.com
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