Verint Announces Upsize and Pricing of Offering of Convertible Senior Notes
April 06 2021 - 11:05PM
Business Wire
Verint® Systems Inc. (NASDAQ: VRNT) today announced that
it has agreed to sell $275 million aggregate principal amount of
its 0.25% convertible senior notes due 2026 (or up to $315 million
in aggregate principal amount if the initial purchasers exercise
their option to purchase additional notes in full) in a private
placement to persons reasonably believed to be qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933. The aggregate principal amount of the offering was
increased from the previously announced offering size of $250
million (or $287.5 million if the initial purchasers exercise their
option to purchase additional notes in full).
The notes will bear interest at a rate of 0.25% per year,
payable semi-annually in arrears, and will mature on April 15,
2026, unless repurchased or converted in accordance with their
terms prior to that date. Upon conversion of the notes, Verint will
pay cash up to the aggregate principal amount of notes to be
converted and pay and/or deliver, as the case may be, cash, shares
of Verint’s common stock or a combination of cash and shares of
Verint’s common stock, at Verint’s election, in respect of the
remainder, if any. Upon conversion, Verint currently intends to
deliver shares of Verint’s common stock in respect of the
remainder. The initial conversion rate of the notes will be 16.1092
shares per $1,000 principal amount of notes, which is equal to a
conversion price of approximately $62.08 per share, subject to
adjustment in certain circumstances. The initial conversion price
represents a premium of approximately 32.5% to the $46.85 per share
closing price of Verint’s common stock on the Nasdaq Global Select
Market on April 6, 2021.
Verint estimates the aggregate net proceeds from the offering to
be approximately $267 million (assuming no exercise of the initial
purchasers’ option), after deducting the initial purchaser discount
and estimated offering expenses payable by Verint. Verint intends
to use a portion of the net proceeds from the offering to pay the
costs of the capped call transactions described below. Verint
intends to use the remainder of the net proceeds from the notes
offering, together with the net proceeds from the issuance of
$200.0 million of its Series B convertible preferred stock to an
affiliate of Apax Partners that closed today, to repay a portion of
the outstanding indebtedness under its existing credit facility, to
repay certain amounts owing under interest rate swap agreements and
to repurchase approximately 1.06 million shares of its common
stock, and the remainder is expected to be used for working capital
and other general corporate purposes. The closing of the offering
is expected to occur on April 9, 2021, subject to the satisfaction
of customary closing conditions.
In connection with the pricing of the notes, Verint entered into
capped call transactions with certain of the initial purchasers
and/or their respective affiliates and/or other financial
institutions (the “option counterparties”). The capped call
transactions are expected generally to reduce potential dilution to
Verint’s common stock upon any conversion of the notes at maturity
and/or offset any cash payments Verint is required to make in
excess of the principal amount of converted notes, as the case may
be, with such reduction and/or offset subject to a cap based on the
cap price. The cap price of the capped call transactions will
initially be $100.00 per share, which represents a premium of
approximately 113% over the last reported sale price of Verint’s
common stock of $46.85 per share on April 6, 2021, and is subject
to certain adjustments under the terms of the capped call
transactions. If the initial purchasers exercise their option to
purchase additional notes, Verint expects to enter into additional
capped call transactions with the option counterparties.
Verint has been advised that, in connection with establishing
their initial hedges of the capped call transactions, the option
counterparties or their respective affiliates expect to enter into
various derivative transactions with respect to Verint’s common
stock and/or purchase shares of Verint’s common stock concurrently
with, or shortly after, the pricing of the notes, and may unwind
these various derivative transactions and purchase Verint’s common
stock in open market transactions shortly following the pricing of
the notes. These activities could increase (or reduce the size of
any decrease in) the market price of Verint’s common stock or the
notes at that time.
In addition, Verint has been advised that the option
counterparties and/or their respective affiliates may modify their
hedge positions by entering into or unwinding various derivative
transactions referencing Verint’s common stock and/or purchasing or
selling shares of Verint’s common stock or other securities of
Verint in secondary market transactions following the pricing of
the notes and prior to the maturity of the notes (and are likely to
do so following any conversion of notes, any repurchase of notes by
Verint on any fundamental change repurchase date, any redemption
date, or any other date on which any notes are retired by Verint).
These activities could cause or avoid an increase or decrease in
the market price of Verint’s common stock or the notes, which could
affect the ability of noteholders to convert the notes and, to the
extent the activity occurs during any observation period related to
a conversion of the notes, could affect the number of shares and
value of the consideration that noteholders will receive upon
conversion of the notes.
There can be no assurance that the offering will be completed.
The notes were and will be offered only to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
under the Securities Act. Neither the notes nor the shares of
common stock issuable upon conversion of the notes, if any, have
been, nor will 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 absent registration or an applicable
exemption from such registration requirements.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any
such jurisdiction.
About Verint
Verint® (Nasdaq: VRNT) helps the world’s most iconic brands –
including over 85 of the Fortune 100 companies – build enduring
customer relationships by connecting work, data and experiences
across the enterprise. The Verint Customer Engagement portfolio
draws on the latest advancements in AI and analytics, an open cloud
architecture, and The Science of Customer Engagement™ to help
customers close the Engagement Capacity GapTM.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements,”
including statements regarding expectations, predictions, views,
opportunities, plans, strategies, beliefs, and statements of
similar effect relating to Verint Systems Inc., including
statements regarding Verint’s current expectations and beliefs as
to the pricing and closing of the offering and use of the proceeds
thereof. These forward-looking statements are not guarantees of
future performance and they are based on management’s expectations
that involve a number of risks, uncertainties and assumptions, any
of which could cause actual results to differ materially from those
expressed in or implied by the forward-looking statements. For a
detailed discussion of these risk factors, see Verint’s Annual
Report on Form 10-K for the fiscal year ended January 31, 2021 and
other filings Verint makes with the SEC. The forward-looking
statements contained in this press release are made as of the date
of this press release and, except as required by law, Verint
assumes no obligation to update or revise them or to provide
reasons why actual results may differ.
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Investor Relations Matthew
Frankel matthew.frankel@verint.com
Verint Systems (NASDAQ:VRNT)
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