EZCORP Announces Private Offering of $175,000,000 of Convertible Senior Notes Due 2029
December 07 2022 - 8:09AM
Business Wire
EZCORP, Inc. (NASDAQ: EZPW) (the “Company”), a leading provider
of pawn transactions in the United States and Latin America,
announced today that it intends to offer, subject to market
conditions and other factors, $175,000,000 aggregate principal
amount of its convertible senior notes due 2029 (the “Convertible
Notes”) in a private offering to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933 (the “Securities Act”). The Company expects
to grant the initial purchasers an option to purchase, for
settlement within a 13-day period from, and including, the date on
which the Convertible Notes are first issued, up to an additional
$25,000,000 aggregate principal amount of Convertible Notes. The
Convertible Notes are expected to pay interest semiannually in
arrears and will be convertible into cash, shares of the Company’s
Class A common stock or a combination thereof, at the Company’s
election. The Convertible Notes will mature on December 15, 2029,
unless earlier converted, redeemed or repurchased in accordance
with their terms prior to such date. Prior to June 15, 2029, the
Convertible Notes will be convertible at the option of the holder
only upon the occurrence of certain events and during certain
periods, and thereafter, will be convertible at the option of the
holder at any time prior to the close of business on the business
day immediately preceding the maturity date. The interest rate,
initial conversion rate, repurchase rights and other terms of the
Convertible Notes will be determined at the time of pricing of the
offering.
The Company expects to use up to the full net proceeds from the
offering of Convertible Notes to repurchase a portion of its
outstanding 2.875% Convertible Senior Notes Due 2024 (the “2024
Convertible Notes”) and/or 2.375% Convertible Senior Notes Due 2025
(the “2025 Convertible Notes” and, together with the 2024
Convertible Notes, the “Existing Convertible Notes”) as described
below. The Company may also use a portion of the net proceeds from
the offering of the Convertible Notes to repurchase for cash shares
of its Class A common stock concurrently with the offering of
Convertible Notes as described below. The Company intends to use
any excess proceeds for general corporate purposes, and may also
use all or a portion of the remaining net proceeds from the
offering to repurchase other shares of its Class A common stock
from time to time, and/or to repurchase, redeem or otherwise retire
its indebtedness (including, without limitation, its Existing
Convertible Notes) from time to time.
Contemporaneously with the pricing of the Convertible Notes in
the offering, the Company expects to enter into separate, privately
negotiated transactions (the “concurrent note repurchases”) with
one or more holders of the Existing Convertible Notes to repurchase
a portion of the 2024 Convertible Notes and/or the 2025 Convertible
Notes. In addition, the Company may, from time to time, repurchase,
redeem or otherwise retire additional Existing Convertible Notes.
The terms of the concurrent note repurchases are anticipated to be
individually negotiated with one or more holders of the Existing
Convertible Notes and will depend on several factors, including the
market price of the Company’s Class A common stock and the trading
price of the Existing Convertible Notes at the time of each such
concurrent note repurchase. The concurrent note repurchases are not
conditioned upon the completion of the offering, nor is the
completion of the offering conditioned upon the concurrent note
repurchases. No assurance can be given as to how much, if any, of
the Existing Convertible Notes will be repurchased or the terms on
which they will be repurchased.
The Company expects that certain holders of the Existing
Convertible Notes that the Company agrees to repurchase that have
hedged their equity price risk with respect to such Existing
Convertible Notes will, concurrently with or shortly after the
pricing of the Convertible Notes, unwind all or part of their hedge
positions in respect of their Existing Convertible Notes subject to
such repurchase by buying the Company’s Class A common stock and/or
entering into or unwinding various derivative transactions with
respect to the Company’s Class A common stock. Any repurchase of
the Existing Convertible Notes and the potential related market
activities by holders of the Existing Convertible Notes
participating in the concurrent note repurchases could increase (or
reduce the size of any decrease in) the market price of the
Company’s Class A common stock, which may affect the trading price
of the Convertible Notes at that time and may result in a higher
effective conversion price of the Convertible Notes. The Company
cannot predict the magnitude of such market activity or the overall
effect it will have on the price of the Convertible Notes or the
Company’s Class A common stock.
In addition, concurrently with the offering of the Convertible
Notes, the Company may use a portion of the net proceeds from the
offering to repurchase for cash shares of its Class A common stock
from purchasers of Convertible Notes in the offering in privately
negotiated transactions effected with or through one of the initial
purchasers or its affiliate (the “concurrent share repurchases”).
The Company expects the purchase price per share of its Class A
common stock repurchased in such concurrent share repurchases to
equal the closing sale price per share of the Company’s Class A
common stock on the Nasdaq Global Select Market on the date on
which the offering of Convertible Notes prices. These repurchases
could increase, or prevent a decrease in, the market price of the
Company’s Class A common stock. In the case of the repurchases
effected concurrently with the offering, this activity could
increase, or prevent a decrease in, the market price of the
Company’s Class A common stock or the Convertible Notes
concurrently with, or shortly after, the pricing of the Convertible
Notes, and could result in a higher effective conversion price for
the Convertible Notes. No assurance can be given as to the size, if
any, of such repurchases.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any securities, nor will 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 Convertible Notes and any shares of the Company’s Class A
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 may not be offered or sold in
the United States absent registration or an applicable exemption
from registration requirements. The offering is being made to
persons reasonably believed to be qualified institutional buyers
pursuant to Rule 144A under the Securities Act.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This announcement contains certain forward-looking statements
regarding the Company’s strategy, initiatives and expected
performance. These statements are based on the Company’s current
expectations as to the outcome and timing of future events. All
statements, other than statements of historical facts, including
all statements regarding the proposed offering of the Convertible
Notes and any concurrent note repurchases or concurrent share
repurchases, that address activities or results that the Company
plans, expects, believes, projects, estimates or anticipates will,
should or may occur in the future, including future capital
expenditures and future financial or operating results, are
forward-looking statements. Actual results for future periods may
differ materially from those expressed or implied by these
forward-looking statements due to a number of uncertainties and
other factors, including operating risks, liquidity risks,
legislative or regulatory developments, market factors, current or
future litigation and risks associated with the COVID-19 pandemic.
For a discussion of these and other factors affecting the Company’s
business and prospects, see the Company’s annual, quarterly and
other reports filed with the Securities and Exchange Commission.
The Company undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results over time.
ABOUT EZCORP
Formed in 1989, EZCORP has grown into a leading provider of pawn
transactions in the United States and Latin America. It also sells
merchandise, primarily collateral forfeited from pawn operations
and pre-owned merchandise purchased from customers. We are
dedicated to satisfying the short-term cash needs of consumers who
are both cash and credit constrained, focusing on an
industry-leading customer experience. EZCORP is traded on the
NASDAQ stock market under the symbol EZPW and is a member of the
S&P 1000 Index and NASDAQ Composite Index.
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version on businesswire.com: https://www.businesswire.com/news/home/20221206006148/en/
Email: Investor_Relations@ezcorp.com Phone: (512) 314-2220
Jean Marie Young Managing Director, Three Part Advisors Three
Part Advisors Email: jyoung@threepa.com Phone: (631) 418-4339
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