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Shopify Priced 1.1M Shares of Class A Subordinate Voting Shares @$900/Share

Shopify Inc.

· 09/16/2020 05:54
Shopify Inc. (NYSE:SHOP) (TSX:SHOP) announced the pricing of its previously announced public offering of 1,100,000 Class A subordinate voting shares (the "Offered Shares") at a price to the public of US$900 per share (such offering, the "Equity Offering") and its previously announced public offering of US$800,000,000 aggregate principal amount of convertible senior notes due 2025 (the "Notes") (such offering, the "Note Offering", and together with the Equity Offering, the "Offerings"). The gross proceeds from the Equity Offering, before underwriting discounts and offering costs, are expected to be US$990,000,000, and the gross proceeds from the Note Offering, before underwriting discounts and offering costs, are expected to be US$800,000,000. The Equity Offering and the Note Offering are not conditional upon one another. Shopify has granted the Equity Underwriters (as defined below) an over-allotment option to purchase up to an additional 165,000 Class A subordinate voting shares to be sold pursuant to the Equity Offering (the "Equity Over-Allotment Option"). The Equity Over-Allotment Option is exercisable for a period of 30 days from the date of the final prospectus supplement relating to the Equity Offering. Shopify has also granted the Note Underwriters (as defined below) an over-allotment option to purchase up to an additional US$120,000,000 aggregate principal amount of Notes (the "Note Over-Allotment Option"). The Note Over-Allotment Option is exercisable for a period of 30 days from the date of the final prospectus supplement relating to the Note Offering. Shopify expects to use the net proceeds of the Offerings to strengthen its balance sheet, providing flexibility to fund its growth strategies. The closings of the Equity Offering and the Note Offering are subject to a number of closing conditions, including the listing of the Offered Shares and approval to list the Class A subordinate voting shares underlying the Notes on the NYSE and the TSX, and any required approvals of each exchange, and are expected to occur on or about September 18, 2020. The Equity Offering is being led by Citigroup, Goldman Sachs & Co. LLC and Credit Suisse, with RBC Capital Markets acting as Co-Manager (the "Equity Underwriters"), and the Note Offering is being led by Goldman Sachs & Co. LLC, Citigroup and Credit Suisse, with RBC Capital Markets acting as Co-Manager (the "Note Underwriters"). The Notes will be senior, unsecured obligations of Shopify, and interest will be payable semi-annually in cash at a rate of 0.125% per annum on May 1 and November 1 of each year, beginning on May 1, 2021. The Notes will mature on November 1, 2025 unless redeemed, repurchased, or converted prior to such date. Prior to August 1, 2025, the Notes will be convertible at the option of the holders during certain periods, upon satisfaction of certain conditions. Thereafter, the Notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Notes may be settled, at Shopify's election, in Shopify's Class A subordinate voting shares, cash or a combination thereof. The Notes will have an initial conversion rate of 0.6944 Class A subordinate voting shares per US$1,000 principal amount of Notes. This represents an initial conversion price of approximately US$1,440 per Class A subordinate voting share. The initial conversion price of the Notes represents a premium of approximately 60% to the price per Offered Share in the Equity Offering.