Item 1.01 Entry into a Material Definitive Agreement.
Underwritten Public Offering of 0.250% Convertible Senior Notes due 2024
On June 5, 2019, Altair Engineering Inc. (the “Company”) entered into an underwriting agreement (the “
Note Underwriting
Agreement
”) with J.P. Morgan Securities LLC, as representative of the underwriters named therein (the “
Underwriters
”), to issue and sell $200.0 million aggregate principal amount of 0.250% Convertible Senior Notes due
2024 (the “
Notes
”) in a public offering pursuant to a Registration Statement on Form
S-3
(File No. 333-231948 (the “
Registration Statement
”)) and a related prospectus
supplement, filed with the Securities and Exchange Commission (the “
Note Offering
”). In addition, the Company granted the Underwriters an option to purchase, for a period of 30 calendar days from June 5, 2019, up to an additional
$30.0 million aggregate principal amount of Notes. The Company estimates that the net proceeds from the Note Offering will be approximately $192.8 million, or approximately $221.9 million if the Underwriters exercise in full their
option to purchase the additional Notes, after deducting underwriting discounts and estimated offering expenses.
The foregoing
description of the Note Underwriting Agreement is not complete and is qualified in its entirety by reference to the Note Underwriting Agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on Form
8-K
and is incorporated herein by reference.
The Notes will be issued pursuant to a supplemental
indenture to be entered into supplementing the Indenture, anticipated to be dated June 10, 2019, by and between the Company and U.S. Bank National Association, as trustee.
The Notes Offering is expected to close on or about June 10, 2019, subject to customary closing conditions. In connection with this offering,
the legal opinion as to the legality of the Notes sold is filed as Exhibit 5.1 to this Current Report on Form
8-K
and is incorporated herein and into the Registration Statement by reference.
Second Amendment to the Company’s Third Amended and Restated Credit Agreement Amendment
On June 5, 2019, the Company entered into the Second Amendment to its Third Amended and Restated Credit Agreement, by and among the Company, as
borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (the “Amendment”), which amends the Third Amended and Restated Credit Agreement, dated as of October 18, 2017 by and among the Company, as
borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, Sole Bookrunner and Sole Lead Arranger (the “Amended and Restated Credit Agreement”).
The Amendment, among other things, extends the maturity date of the facility to December 15, 2023, and makes certain of the negative
covenants less restrictive, including permitting the Company to incur more indebtedness, make more investments, redeem more equity and prepay more debt.
In addition, the Amendment amends the Maximum Net Leverage Ratio and adds a Senior Secured Leverage Ratio as follows:
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Maximum Net Leverage Ratio
: On the last day of each fiscal quarter, the Company on a consolidated basis
will not permit the ratio of total indebtedness (net of unrestricted domestic cash in excess of $20.0 million) to EBITDA for the rolling four quarter period ending on such date to be greater than 5.00 to 1.00 as of the such fiscal quarter.
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