By Abigail W. Adams
Portland, Me., Jan. 12 – Coupa Software Inc. priced $200 million in five-year convertible notes after the market close on Thursday with a coupon of 0.375% and an initial conversion premium of 32.5%.
The deal came at the rich end of price talk for a coupon of 0.375% to 0.875% and richer than talk for an initial conversion premium of 25% to 30%.
Morgan Stanley, J.P. Morgan, Goldman Sachs, Barclays and RBC are bookrunners for the Rule 144A deal, which carries a greenshoe of $30 million.
In connection with the pricing, Coupa entered into capped call transactions with the initial purchasers and their counterparties at a strike price of $63.821, representing a premium from the company’s perspective of 90%, according to a company release.
The 0.375% notes due Jan. 15, 2023 are contingently convertible until Oct. 15, 2022. Notes may be settled in cash, shares, or a combination of both, according to a company release.
The initial conversion rate is 22.4685 and the initial conversion price $44.51.
The notes are non-callable for three years, then callable subject to a 130% hurdle. There is takeover protection.
Proceeds are expected to be $193.8 million, or $223 million if the greenshoe is exercised. Proceeds will be used to cover the cost of capped call transactions, potential acquisitions, and for general corporate purposes.
Coupa is a San Mateo, Calif.-based cloud platform for business spend management.
| Issuer: | Coupa Software Inc.
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| Issue: | Convertible senior notes
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| Amount: | $200 million
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| Greenshoe: | $30 million
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| Maturity: | Jan. 15, 2023
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| Coupon: | 0.375%
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| Initial conversion premium: | 32.5%
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| Conversion price: | $44.51
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| Conversion rate: | 22.4685
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| Strike price | $63.821
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| Call: | Non-callable for three-years, then subject to a 130% hurdle
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| Net share settlement: | Cash, stock or a combination, at company’s option
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| Contingent conversion: | Until Oct. 15, 2022
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| Bookrunner: | Morgan Stanley, J.P. Morgan, Goldman Sachs, Barclays and RBC
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| Pricing date: | Jan. 11
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| Settlement: | Jan. 17
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| Distribution: | Rule 144A
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| Stock symbol: | COUP
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| Stock price: | $33.59 at close on Jan. 11
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| Market capitalization: | $1.84 billion
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