Huron Consulting Group Inc. (NASDAQ:HURN), a leading provider of
business consulting services, today announced the pricing of $225
million aggregate principal amount of convertible senior notes due
2019 (the "Convertible Notes"). The Convertible Notes were offered
in a private offering to qualified institutional buyers pursuant to
Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"). The Company granted an option to the initial
purchasers to purchase, within a period of 13 days beginning on,
and including, the date the Convertible Notes are first issued, up
to an additional $25 million aggregate principal amount of
Convertible Notes.
The Convertible Notes will pay interest semiannually at an
annual rate of 1.25% and will be convertible into cash, shares of
the Company's common stock or a combination thereof, at the
Company's election, based on the applicable conversion rate. The
Convertible Notes have an initial conversion rate of 12.5170 shares
of the Company's common stock per $1,000 principal amount of the
Convertible Notes (which is equal to an initial conversion price of
approximately $79.89 per share of the Company's common stock),
representing an initial conversion premium of approximately 27.5%
above the closing price of $62.66 per share of the Company's common
stock on September 4, 2014. The Convertible Notes will mature on
October 1, 2019, unless earlier repurchased or converted in
accordance with their terms prior to such date. Prior to July 1,
2019, the Convertible Notes will be convertible only upon the
occurrence of certain events and during certain periods, and
thereafter, at any time prior to the close of business on the
second scheduled trading day immediately preceding the maturity
date. The Company expects to close the offering on or about
September 10, 2014, subject to the satisfaction of various
customary closing conditions.
In connection with the pricing of the Convertible Notes, the
Company entered into privately negotiated convertible note hedge
transactions with one or more of the initial purchasers or their
respective affiliates (in this capacity, the "hedge
counterparties"). The convertible note hedge transactions cover,
subject to customary anti-dilution adjustments, the number of
shares of common stock initially underlying the Convertible Notes
sold in the offering. The Company also entered into separate,
privately negotiated warrant transactions with the hedge
counterparties relating to the same number of shares of the
Company's common stock, subject to customary anti-dilution
adjustments, with an initial strike price of approximately $97.12
per share, subject to certain adjustments, which is approximately
55.0% higher than the closing price of the Company's common stock
on September 4, 2014. The warrants evidenced by the warrant
transactions will be settled on a net-share basis. If the initial
purchasers exercise their option to purchase additional notes, the
Company intends to enter into additional convertible note hedge
transactions and additional warrant transactions with the hedge
counterparties, which will initially cover, subject to customary
anti-dilution adjustments, the number of shares of the Company's
common stock that will initially underlie the additional notes sold
to the initial purchasers.
The convertible note hedge transactions are intended to
generally reduce the potential dilution with respect to the
Company's common stock and/or offset any potential cash payments
the Company is required to make in excess of the principal amount
of converted notes, as the case may be, upon any conversion of the
Convertible Notes in the event that the price per share of the
Company's common stock is greater than the strike price of the
convertible note hedge transactions. The Company expects that
to the extent the price per share of the Company's common stock
exceeds the strike price of the warrants, the warrant transactions
could separately have a dilutive effect with respect to the
Company's common stock.
The Company estimates that it will receive net proceeds from the
offering of approximately $218.3 million (or approximately $242.6
million if the initial purchasers exercise their option to purchase
additional notes in full), after deducting the initial purchasers’
discounts and commissions and the Company’s estimated offering
expenses.
The Company intends to use:
- approximately $16.65 million of the net
proceeds of the offering to fund the cost of entering into the
convertible note hedge transactions (after such cost is partially
offset by the proceeds that it receives from entering into the
warrant transactions);
- approximately $25 million of the net
proceeds of the offering to repurchase shares of the Company's
common stock concurrently with the offering from purchasers of the
Convertible Notes; and
- the remainder of the net proceeds of
the offering for working capital and general corporate
purposes.
The Company may also use a portion of the net proceeds to
acquire businesses through one or more acquisitions or other
strategic transactions. However, the Company has no current
commitments or obligations with respect to any acquisitions or
other strategic transactions.
If the initial purchasers exercise their option to purchase
additional notes, the Company intends to use a portion of the
additional net proceeds to fund the cost of entering into
additional convertible note hedge transactions (which cost will be
partially offset by the proceeds that it expects to receive from
entering into additional warrant transactions). The Company intends
to use the remainder of such net proceeds for working capital,
acquisitions, and general corporate purposes.
The Company has been advised by the hedge counterparties that in
connection with establishing their initial hedge position with
respect to the convertible note hedge transactions and warrant
transactions, the hedge counterparties and/or their respective
affiliates expect to enter into various derivative transactions
with respect to the Company’s common stock and/or purchase shares
of the Company’s common stock in privately negotiated transactions
and/or open market transactions concurrently with, or shortly
after, the pricing of the Convertible Notes. This activity could
increase (or reduce the size of any decrease in) the market price
of the Company’s common stock or the Convertible Notes at that
time.
The Company has also been advised by the hedge counterparties
that the hedge counterparties or their respective affiliates are
likely to modify their hedge positions by entering into or
unwinding various derivative transactions with respect to the
Company’s common stock and/or purchasing or selling the Company’s
common stock or other of the Company’s securities or instruments,
including the Convertible Notes in secondary market transactions
following the pricing of the Convertible Notes and prior to the
maturity of the Convertible Notes.
This press release is neither an offer to sell nor a
solicitation of an offer to buy the Convertible Notes or any shares
of common stock issuable upon conversion of the Convertible Notes,
nor shall there be any sale of these securities in any state or
jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such state or jurisdiction.
The offer and sale of the Convertible Notes and any common stock
issuable upon conversion of the Convertible Notes have not been
registered under the Securities Act, or the securities laws of any
other jurisdiction, and the Convertible Notes and any such shares
may not be offered or sold in the United States, or to U.S.
persons, absent registration or an applicable exemption from
registration requirements. The offering is being made to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act.
The convertible note hedge transactions and warrant transactions
have not been and will not be registered under the Securities Act
or the securities laws of any other jurisdiction and may not be
offered or sold in the United States without registration or an
applicable exemption from registration requirements.
About Huron Consulting Group
Huron Consulting Group helps clients in diverse industries
improve performance, transform the enterprise, reduce costs,
leverage technology, process and review large amounts of complex
data, address regulatory changes, recover from distress and
stimulate growth. Our professionals employ their expertise in
finance, operations, strategy and technology to provide our clients
with specialized analyses and customized advice and solutions that
are tailored to address each client's particular challenges and
opportunities to deliver sustainable and measurable results. The
Company provides consulting services to a wide variety of both
financially sound and distressed organizations, including
healthcare organizations, leading academic institutions, Fortune
500 companies, governmental entities and law firms. Huron has
worked with more than 425 health systems, hospitals, and academic
medical centers; more than 400 corporate general counsel; and more
than 350 universities and research institutions.
Statements in this press release that are not historical in
nature, including those concerning the Company’s current
expectations about its future requirements and needs, are
“forward-looking” statements as defined in Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)
and the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are identified by words such as “may,”
“should,” “expects,” “provides,” “anticipates,” “assumes,” “can,”
“will,” “meets,” “could,” “likely,” “intends,” “might,” “predicts,”
“seeks,” “would,” “believes,” “estimates,” “plans” or “continues.”
These forward-looking statements reflect our current expectations
about our future requirements and needs, results, levels of
activity, performance, or achievements, including, without
limitation, current expectations with respect to, among other
factors, utilization rates, billing rates, and the number of
revenue-generating professionals; that we are able to expand our
service offerings; that we successfully integrate the businesses we
acquire; and that existing market conditions continue to trend
upward. These statements involve known and unknown risks,
uncertainties and other factors, including, among others, those
described under “Item 1A. Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2013, that may cause
actual results, levels of activity, performance or achievements to
be materially different from any anticipated results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. We disclaim any obligation to update or
revise any forward-looking statements as a result of new
information or future events, or for any other reason.
Huron Consulting Group Inc.Media Contact:Jennifer
Frost
Hennagir312-880-3260jfrost-hennagir@huronconsultinggroup.comorInvestor
Contact:C. Mark HusseyorEllen
Wong312-583-8722investor@huronconsultinggroup.com
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