MINDBODY, Inc. (NASDAQ:MB), the leading technology platform for the
fitness, wellness and beauty services industries, today announced
the pricing of $270 million aggregate principal amount of 0.375%
convertible senior notes due 2023 in a private placement to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended. The aggregate principal amount
of the offering was increased from the previously announced
offering size of $200 million. MINDBODY also granted the
initial purchasers of the notes a 13-day option to purchase up to
an additional $40.5 million principal amount of notes. The sale of
the notes is expected to close on June 12, 2018, subject to
customary closing conditions.
The notes will be senior unsecured obligations
of MINDBODY and bear interest at a rate of 0.375% per annum,
payable semi-annually in arrears on June 1 and December 1 of each
year, beginning on December 1, 2018. The notes will mature on June
1, 2023, unless earlier converted, redeemed or repurchased. The
initial conversion rate will be 20.1898 shares of MINDBODY’s Class
A common stock per $1,000 principal amount of notes (equivalent to
an initial conversion price of approximately $49.53 per share of
Class A common stock). The initial conversion price of the notes
represents a premium of approximately 30% over the last reported
sale price of MINDBODY’s Class A common stock on the NASDAQ Global
Market on June 7, 2018. Prior to the close of business on the
business day immediately preceding December 1, 2022, the notes will
be convertible at the option of the holders of the notes only upon
the satisfaction of specified conditions and during certain
periods. Thereafter, until the close of business on the
second scheduled trading day preceding the maturity date, the notes
will be convertible at the option of the holders of notes at any
time regardless of such conditions. The notes will be
convertible into cash, shares of MINDBODY’s Class A common stock or
a combination of cash and shares of MINDBODY’s Class A common
stock, at MINDBODY’s election.
MINDBODY may redeem, for cash, all or any
portion of the notes, at its option, on or after June 6, 2021 if
the last reported sale price of MINDBODY’s Class A common stock has
been at least 130% of the conversion price 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 MINDBODY provides notice of redemption, at a redemption
price equal to 100% of the principal amount of the notes to be
redeemed, plus accrued and unpaid interest. If MINDBODY undergoes a
“fundamental change,” holders of the notes may require MINDBODY to
repurchase for cash all or any portion of their notes at a
repurchase price equal to 100% of the principal amount of the notes
to be repurchased, plus accrued and unpaid interest to, but
excluding, the redemption date. In addition, upon certain corporate
events or upon redemption, MINDBODY will, under certain
circumstances, increase the conversion rate for holders who convert
notes in connection with such a corporate event or redemption.
MINDBODY estimates that the net proceeds from
the offering will be approximately $261.5 million (or $300.9
million if the initial purchasers exercise their option to purchase
additional notes in full), after deducting the initial purchasers’
discounts and commissions and estimated expenses payable by
MINDBODY. MINDBODY intends to use a portion of the net proceeds
from the offering to pay the cost of the capped call transactions
described below. MINDBODY intends to use the remainder of the net
proceeds for working capital and general corporate purposes.
MINDBODY may also use a portion of the net proceeds from this
offering for the acquisition of, or investment in, technologies,
solutions or businesses that complement its business, although it
has no commitments or agreements to enter into any such
acquisitions or investments at this time. If the initial purchasers
exercise their option to purchase additional notes, MINDBODY
expects to use a portion of the net proceeds from the sale of the
additional notes to enter into additional capped call transactions
as described below. MINDBODY intends to use the remainder of
the net proceeds from sale of the additional notes as described
above.
In connection with the pricing of the notes,
MINDBODY entered into capped call transactions with one of the
initial purchasers and other financial institutions (the “option
counterparties”). The capped call transactions are expected
generally to reduce potential dilution to MINDBODY’s Class A common
stock upon any conversion of notes and/or offset any cash payments
MINDBODY 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 initially equal to $76.20 per share (which
represents a premium of 100% over the last reported sale price of
MINDBODY’s Class A common stock on the NASDAQ Global Market on June
7, 2018).
In connection with establishing their initial
hedges of the capped call transactions, the option counterparties
or their respective affiliates expect to purchase shares of
MINDBODY’s Class A common stock and/or enter into various
derivative transactions with respect to MINDBODY’s Class A 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 MINDBODY’s Class A common stock or the
notes at that time.
In addition, MINDBODY expects that the option
counterparties or their respective affiliates may modify their
hedge positions by entering into or unwinding various derivatives
with respect to MINDBODY’s Class A common stock and/or purchasing
or selling MINDBODY’s Class A common stock or other securities of
MINDBODY in secondary market transactions following the pricing of
the notes and prior to the maturity of the notes (and are likely to
do so during any observation period related to a conversion of
notes). This activity could also cause or avoid an increase or a
decrease in the market price of MINDBODY’s Class A common stock or
the notes, which could affect a noteholder’s ability to convert its
notes and, to the extent the activity occurs during any observation
period related to a conversion of notes, it could affect the number
of shares and value of the consideration that a noteholder will
receive upon conversion of its notes.
Neither the notes, nor any shares of MINDBODY
Class A common stock issuable upon conversion of the notes, have
been registered under the Securities Act or any state securities
laws, and unless so registered, such securities may not be offered
or sold in the United States absent registration or an applicable
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other
applicable securities laws.
This press release is neither an offer to sell
nor a solicitation of an offer to buy any securities, nor shall it
constitute an offer, solicitation or sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction.
About MINDBODY
MINDBODY, Inc. (NASDAQ:MB) is the leading
technology platform for the fitness, wellness and beauty services
industries. Local entrepreneurs worldwide use MINDBODY’s integrated
software and payments platform to run, market and build their
businesses. Consumers use MINDBODY to more easily find, engage and
transact with providers in their local communities.
Investor Relations
Contact:Nicole
GundersonIR@mindbodyonline.com 888-782-7155
Media Contact:Jennifer
Saxonjennifer.saxon@mindbodyonline.com 805-419-2839
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the federal securities laws.
These statements include, but are not limited to, statements
concerning the expected closing of the offering and the capped call
transactions and the anticipated use of the net proceeds from the
offering. Forward-looking statements include all statements
that are not historical facts. In some cases, forward-looking
statements can be identified by terms such as “anticipates,”
“believes,” “could,” “estimates,” “expects,” “intends,” “may,”
“plans,” “potential,” “will,” or similar expressions and the
negatives of those words. Forward-looking statements involve
substantial risks and uncertainties that may cause actual results
to differ materially from those that we expect. These risks and
uncertainties include market risks, trends and conditions. These
and other risks are more fully described in our filings with the
Securities and Exchange Commission, including in the section titled
“Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2017 and in the section titled “Risk Factors” in our
subsequent Quarterly Report on Form 10-Q for the quarter ended
March 31, 2018. In light of these risks, you should not place undue
reliance on such forward-looking statements. Forward-looking
statements represent our beliefs and assumptions only as of the
date of this press release. We disclaim any obligation to update
forward-looking statements.
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