SAN MATEO, Calif., June 15, 2020 /PRNewswire/ -- Coupa Software
(NASDAQ: COUP) today announced that it has closed its offering of
convertible senior notes due 2026 (the "notes") for gross proceeds
of $1.38 billion. The proceeds
include the full exercise of the $180
million option to purchase additional notes granted by Coupa
to the initial purchasers. The notes were sold only to
persons reasonably believed to be qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as
amended.
![Coupa Software (PRNewsfoto/Coupa Software) Coupa Software (PRNewsfoto/Coupa Software)](https://mma.prnewswire.com/media/818424/coupa_Logo.jpg)
The notes are senior, unsecured obligations of Coupa, and
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. The notes will
mature on June 15, 2026 unless
redeemed, repurchased or converted prior to such date. Prior to 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. 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).
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 estimates 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. Coupa used approximately $192.8
million of the net proceeds to pay the cost of the capped
call transactions described below. Coupa also used approximately
$167.7 million of the net proceeds to
repurchase for cash approximately $33.0
million of aggregate principal amount of Coupa's outstanding
0.375% Convertible Senior Notes due 2023 (the "2023 notes"). Coupa
also entered into agreements to repurchase for cash an additional
approximately $56.0 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. Coupa intends to use
the remainder of the net proceeds from this offering for general
corporate purposes, potential acquisitions, strategic transactions
and working capital.
Coupa may redeem all or any portion of the notes, at its option,
on or after June 20, 2023 and prior
to the 21st scheduled trading day immediately preceding
the maturity date, at a redemption price equal to 100% of the
principal amount of the notes to be redeemed, plus accrued and
unpaid interest thereon, if the last reported sale price of Coupa
common stock has been at least 130% of the conversion price then in
effect for at least 20 trading days (whether or not consecutive)
during any 30 consecutive trading day period (including the last
trading day of such period) ending on, and including, the trading
day immediately preceding the date on which Coupa provides written
notice of redemption.
Holders of notes may require Coupa to repurchase their notes
upon the occurrence of certain events that constitute a fundamental
change under the indenture governing the notes at a purchase price
equal to 100% of the principal amount thereof, plus accrued and
unpaid interest to, but excluding, the date of repurchase. In
connection with certain corporate events or if Coupa issues a
notice of redemption, it will, under certain circumstances,
increase the conversion rate for holders who elect to convert their
notes in connection with such corporate event or during the
relevant redemption period.
In connection with the pricing of the notes, Coupa has entered
into privately negotiated capped call transactions with certain of
the initial purchasers of the notes or their respective affiliates
and with other financial institutions (the "capped call
counterparties"). The capped call transactions initially cover,
subject to customary anti-dilution adjustments, the number of
shares of Coupa common stock that initially underlie the notes,
including the notes purchased pursuant to the option to purchase
additional notes. The cap price of the capped call transactions is
initially approximately $503.42 per
share of Coupa common stock, representing a premium of 125% above
the last reported sale price of $223.74 per share of Coupa common stock on
June 10, 2020, and is subject to
certain adjustments under the terms of the capped call
transactions. The capped call transactions are expected generally
to reduce or offset potential dilution to holders of Coupa common
stock upon conversion of the notes and/or offset the potential cash
payments that Coupa could be required to make in excess of the
principal amount of any converted notes upon conversion thereof,
with such reduction and/or offset subject to a cap based on the cap
price.
In connection with establishing their initial hedge of the
capped call transactions, the capped call counterparties have
advised Coupa that they and/or their respective affiliates expect
to enter into various derivative transactions with respect to Coupa
common stock and/or purchase Coupa common stock concurrently with,
or shortly after, the pricing of the notes. This activity could
increase (or reduce the size of any decrease in) the market price
of Coupa common stock or the notes concurrently with, or shortly
after, the pricing of the notes.
In addition, the capped call counterparties and/or their
respective affiliates may modify their hedge positions by entering
into or unwinding various derivatives with respect to Coupa common
stock and/or purchasing or selling Coupa common stock in secondary
market transactions following the pricing of the notes and prior to
the maturity of the notes. This activity could decrease (or avoid
an increase in) the market price of Coupa common stock or the
notes, which could affect noteholders' ability to convert the notes
and, to the extent the activity occurs during any observation
period related to a conversion of notes, it could affect the amount
and value of the consideration that noteholders will receive upon
conversion of such notes.
In connection with any repurchase of the 2023 notes, Coupa
expects that holders of the outstanding 2023 notes that are being
repurchased and have hedged their equity price risk with respect to
such notes (the "hedged holders") will have, concurrently with the
pricing of the notes, unwound their hedge positions by buying Coupa
common stock and/or entered into or unwound various derivative
transactions with respect to Coupa common stock. The amount of
Coupa common stock purchased by the hedged holders may be
substantial in relation to the historic average daily trading
volume of Coupa common stock, and this activity by the hedged
holders may have increased the effective conversion price of the
notes.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities (including the shares of
Coupa common stock, if any, into which the notes are convertible)
and shall not constitute an offer, solicitation or sale in any
jurisdiction in which such offer, solicitation or sale is
unlawful.
The notes and any shares of common stock issuable upon
conversion of the notes have not been registered under the
Securities Act of 1933, as amended, or any state securities laws
and may not be offered or sold in the
United States absent registration or an applicable exemption
from such registration requirements.
Forward-Looking Statements
This press release contains forward-looking statements
including, among other things, statements relating to the intended
use of the net proceeds from the offering, including any
repurchases of the 2023 notes. These forward-looking statements are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements involve
risks and uncertainties that could cause actual results to differ
materially, including, but not limited to, the amount of 2023 notes
repurchased, the impact of general economic, industry or political
conditions and the COVID-19 pandemic in the United States or internationally,
prevailing market conditions and the anticipated use of the net
proceeds of the offering, which could change as a result of market
conditions or for other reasons.
Coupa assumes no obligation to, and does not currently intend
to, update any such forward-looking statements after the date of
this release.
About Coupa Software
Coupa Software is a leading provider of business spend
management (BSM) solutions. We offer a comprehensive, cloud-based
BSM platform that connects our global community of customers with
more than five million suppliers around the world. Our
platform provides greater visibility into and control over how
companies spend money. Using our platform, businesses are able to
achieve real, measurable value and savings that drive their
profitability.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/coupa-announces-closing-of-1-2-billion-convertible-senior-notes-due-2026-and-full-exercise-of-initial-purchasers-180-million-option-to-purchase-additional-notes-301077140.html
SOURCE Coupa Software