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Envestnet Raises $486M Via Upsized Private Institutional Debt To Repurchase Outstanding Convertible Notes

Benzinga · 11/15/2022 16:43
  • Envestnet, Inc (NYSE:ENV) priced $500 million of 2.625% convertible notes due 2027 in an upsized private institutional offering.
  • The provider of intelligent systems for wealth management and financial wellness raised the offering size from the previously announced offering size of $350 million.
  • The company also granted the initial purchasers of the Notes an option to purchase, for settlement, within 13 days to cover over-allotments, up to an additional $75 million of Notes.
  • The Notes will mature on December 1, 2027. Interest will accrue on the Notes at a rate of 2.625% per year and will be payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2023.
  • The initial conversion rate for the Notes represents a premium of approximately 32.5% over the last reported sale price of $55.37 on November 14, 2022.
  • The company entered into privately negotiated capped call transactions with certain initial purchasers or affiliates.
  • The cap price of the capped call transactions represents a premium of 100% over the last reported sale price of $55.37.
  • The company estimates net proceeds of $485.5 million or approximately $558.4 million, assuming the initial purchasers exercise their option to purchase additional Notes in full.
  • The company intends to use $494.2 million of the net proceeds plus available cash to repurchase for cash a portion of its outstanding convertible notes. 
  • The company expects to use $69.1 million of the net proceeds from this offering to pay the cost of entering into the capped call transactions.
  • In addition, the company entered into transactions with certain holders of 1.75% convertible notes due 2023 and the 0.75% convertible notes due 2025 to repurchase $300.0 million of the 2023 Convertible Notes for $312.4 million plus accrued interest in cash and $200.0 million of the 2025 Notes for $181.8 million in cash plus accrued interest.
  • Envestnet held $241.3 million in cash and cash equivalents and $862.5 million in outstanding debt as of September 30.
  • Price Action: ENV shares closed higher by 2.96% at $57.07 on Tuesday.