By Rebecca Melvin
Concord, N.H., Sept. 14 – Porch Group Inc. priced an upsized $385 million of five-year convertible notes after the market close on Monday with a 0.75% coupon and an initial conversion premium of 32.5%, according to a company news release.
The deal was initially talked at $350 million in size. There is also a $40 million greenshoe, which was downsized from $52.5 million.
Pricing came at the midpoint of 0.5% to 1% coupon talk and 30% to 35% talk for the initial conversion premium.
Goldman Sachs & Co. LLC (lead left), J.P. Morgan Securities LLC and Oppenheimer & Co. Inc. are bookrunners for the Rule 144A offering.
The notes are non-callable until Sept. 20, 2024 and then subject to a 130% hurdle.
There is dividend and takeover protection.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company entered into capped call transactions with Goldman Sachs, JPMorgan Chase Bank NA, Bank of Montreal and Jefferies International Ltd. The strike price is initially $37.74, representing a 100% premium from the issuer’s perspective.
Proceeds will be used to cover the cost of the call spread, to repay outstanding borrowings under the company’s senior secured term loan and for general corporate purposes, which may include potential acquisitions.
Porch Group is a Seattle-based software company serving home services professionals.
| Issuer: | Porch Group Inc.
|
| Securities: | Convertible senior notes
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| Amount: | $385 million, upsized from $350 million
|
| Greenshoe: | $40 million, downsized from $52.5 million
|
| Maturity: | Sept. 15, 2026
|
| Bookrunners: | Goldman Sachs & Co. LLC (lead left), J.P. Morgan Securities LLC and Oppenheimer & Co. Inc.
|
| Coupon: | 0.75%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $25.00
|
| Conversion rate: | 39.9956
|
| Call options: | Non-callable until Sept. 20, 2024
|
| Put options: | Upon a fundamental change
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| Capped calls: | Yes, at a strike of $37.74, representing a 100% premium from the issuer’s perspective
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| Pricing date: | Sept. 13
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| Settlement date: | Sept. 16
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0.5%-1% and initial conversion premium of 30%-35%
|
| Stock symbol: | Nasdaq: PRCH
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| Stock price: | $18.87 market close Sept. 13
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| Market capitalization: | $1.78 billion
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