- Coupa Software Inc (NASDAQ: COUP) recently announced that it closed its offering of convertible senior notes due 2026 for gross proceeds of $1.38 billion
Coupa Software Inc (NASDAQ: COUP) recently announced that it closed its offering of convertible senior notes due 2026 for gross proceeds of $1.38 billion. These proceeds include the full exercise of the $180 million option to purchase additional notes granted by Coupa to the initial purchasers.
The notes are senior unsecured obligations of Coupa and the interest is payable semi-annually in cash at a rate of 0.375% per annum on June 15 and December 15 of each year, beginning on December 15, 2020. And the notes will mature on June 15, 2026, unless redeemed, repurchased, or converted prior to such date.
Before the close of business on the business day immediately preceding March 15, 2026, the notes are convertible at the option of holders during certain periods upon satisfaction of certain conditions.
On or after March 15, 2026, the notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. And upon conversion, the notes may be settled in shares of Coupa common stock, cash, or a combination of cash and shares of Coupa common stock, at Coupa’s election.
The notes have an initial conversion rate of 3.3732 shares of common stock per $1,000 principal amount of notes, subject to adjustment for certain events. And this represents an initial effective conversion price of approximately $296.45 per share. The initial conversion price of the notes represents a premium of approximately 32.5% to the $223.74 per share closing price of Coupa common stock on June 10, 2020.
Coupa is estimating that the net proceeds from the offering given the initial purchasers’ exercise in full of their option to purchase additional notes are approximately $1.35 billion after deducting the initial purchasers’ discount and estimated offering expenses payable by Coupa. And Coupa used approximately $192.8 million of the net proceeds to pay the cost of the capped call transactions.
And Coupa also used approximately $167.7 million of the net proceeds to repurchase for cash approximately $33 million of the aggregate principal amount of Coupa’s outstanding 0.375% Convertible Senior Notes due 2023.
Coupa also entered into agreements to repurchase for cash an additional approximately $56 million of aggregate principal amount of the 2023 notes based on the volume-weighted average price of Coupa common stock over a period following the pricing of the notes.
Based on the closing price of Coupa common stock on June 10, 2020, Coupa expects to use approximately $281.9 million of the net proceeds from the offering to complete these additional repurchases of 2023 notes. And Coupa intends to use the remainder of the net proceeds from this offering for general corporate purposes, potential acquisitions, strategic transactions and working capital.
