Coupa Software (NASDAQ:COUP) today announced that it has closed its
offering of convertible senior notes due 2023 (the “notes”) for
gross proceeds of $230.0 million. The proceeds include the full
exercise of the $30 million option to purchase additional notes
granted by the Company to the initial purchasers. The notes
were sold to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended.
The notes are senior, unsecured obligations of Coupa, and
interest is payable semi-annually in cash at a rate of 0.375% per
annum on January 15 and July 15 of each year, beginning on July 15,
2018. The notes will mature on January 15, 2023 unless redeemed,
repurchased or converted prior to such date. Prior to October 15,
2022, the notes are convertible at the option of holders during
certain periods, upon satisfaction of certain conditions.
Thereafter, the notes are convertible at any time until the close
of business on the second scheduled trading day immediately
preceding the maturity date. Upon conversion, the notes may be
settled in shares of Coupa common stock, cash or a combination of
cash and shares of Coupa common stock, at Coupa’s election.
The notes have an initial conversion rate of 22.4685 shares of
common stock per $1,000 principal amount of notes (subject to
customary adjustments in certain circumstances). This
represents an initial effective conversion price of approximately
$44.51 per share. The initial conversion price of the notes
represents a premium of approximately 32.5% to the $33.59 per share
closing price of Coupa common stock on January 11, 2018.
Coupa estimates that the net proceeds from the offering, given
the initial purchasers’ exercise in full their option to purchase
additional notes, is approximately $223.0 million, after deducting
the initial purchasers’ discount and estimated offering expenses
payable by Coupa. Coupa used approximately $23.3 million of the net
proceeds to pay the cost of the capped call transactions described
below. Coupa intends to use the remainder of the net proceeds from
this offering for general corporate purposes, potential
acquisitions and strategic transactions. Coupa has no agreements or
understandings with respect to any such acquisitions or strategic
transactions at this time.
Coupa may redeem all or any portion of the notes, at its option,
on or after January 20, 2021, at a redemption price equal to
100% of the principal amount of the notes to be redeemed, plus
accrued and unpaid interest thereon, if the last reported sale
price of Coupa’s common stock has been at least 130% of the
conversion price then in effect for at least 20 trading days
(whether or not consecutive) during any 30 consecutive trading day
period (including the last trading day of such period) ending on,
and including, the trading day immediately preceding the date on
which Coupa provides written notice of redemption.
Holders of notes may require Coupa to repurchase their notes
upon the occurrence of certain events that constitute a fundamental
change under the indenture governing the notes at a purchase price
equal to 100% of the principal amount thereof, plus accrued and
unpaid interest to, but excluding, the date of repurchase. In
connection with certain corporate events or if Coupa issues a
notice of redemption, it will, under certain circumstances,
increase the conversion rate for holders who elect to convert their
notes in connection with such corporate event or during the
relevant redemption period.
In connection with the pricing of the notes, Coupa has entered
into privately negotiated capped call transactions with certain of
the initial purchasers of the notes and/or their respective
affiliates (the “capped call counterparties”). The capped call
transactions initially cover, subject to customary anti-dilution
adjustments, the number of shares of Coupa common stock that
initially underlie the notes, including the notes purchased
pursuant to the option to purchase additional notes. The cap price
of the capped call transactions is initially $63.821 per share of
Coupa’s common stock, representing a premium of 90% above the last
reported sale price of $33.59 per share of Coupa’s common stock on
January 11, 2018, and is subject to certain adjustments under the
terms of the capped call transactions. The capped call transactions
are expected generally to reduce or offset potential dilution to
holders of Coupa’s common stock upon conversion of the notes and/or
offset the potential cash payments that Coupa could be required to
make in excess of the principal amount of any converted notes upon
conversion thereof, with such reduction and/or offset subject to a
cap based on the cap price.
In connection with establishing their initial hedge of the
capped call transactions, the capped call counterparties have
advised Coupa that they and/or their respective affiliates expect
to enter into various derivative transactions with respect to Coupa
common stock and/or purchase Coupa common stock concurrently with,
or shortly after, the pricing of the notes. This activity could
increase (or reduce the size of any decrease in) the market price
of Coupa common stock or the notes concurrently with, or shortly
after, the pricing of the notes.
In addition, the capped call counterparties and/or their
respective affiliates may modify their hedge positions by entering
into or unwinding various derivatives with respect to Coupa common
stock and/or purchasing or selling Coupa common stock in secondary
market transactions following the pricing of the notes and prior to
the maturity of the notes. This activity could decrease (or avoid
an increase) in the market price of Coupa common stock or the
notes, which could affect noteholders’ ability to convert the notes
and, to the extent the activity occurs during any observation
period related to a conversion of notes, it could affect the amount
and value of the consideration that noteholders will receive upon
conversion of such notes.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities (including the shares of
Coupa common stock, if any, into which the notes are convertible)
and shall not constitute an offer, solicitation or sale in any
jurisdiction in which such offer, solicitation or sale is
unlawful.
The notes and any shares of common stock issuable upon
conversion of the notes have not been registered under the
Securities Act of 1933, as amended, or any state securities laws
and may not be offered or sold in the United States absent
registration or an applicable exemption from such registration
requirements.
Forward-Looking Statements:
This press release contains forward-looking statements
including, among other things, statements relating to the intended
use of the net proceeds from the offering. These forward-looking
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements
involve risks and uncertainties that could cause actual results to
differ materially, including, but not limited to, the anticipated
use of the net proceeds of the offering, which could change as a
result of market conditions or for other reasons, and the impact of
general economic, industry or political conditions in the United
States or internationally.
Coupa assumes no obligation to, and does not currently intend
to, update any such forward-looking statements after the date of
this release.
About Coupa Software Coupa Software
(NASDAQ:COUP) is the cloud platform for business spend. We deliver
“Value as a Service” by helping our customers maximize their spend
under management, achieve significant cost savings and drive
profitability. Coupa provides a unified, cloud-based spend
management platform that connects hundreds of organizations
representing the Americas, EMEA, and APAC with millions of
suppliers globally. The Coupa platform provides greater visibility
into and control over how companies spend money. Customers – small,
medium and large – have used the Coupa platform to bring billions
of dollars in cumulative spend under management.
Investor Relations:The Blueshirt Group for
Coupa Ryan Hutchinson415-489-2186 ir@coupa.com
Media Contact: Global Public Relations Orlando
De Bruce650-485-8629 orlando.debruce@coupa.com
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