SAN MATEO, Calif., Nov. 19, 2020 /PRNewswire/ -- GoPro, Inc.
(NASDAQ: GPRO) ("GoPro") today announced that it has priced
$125.0 million aggregate
principal amount of 1.25% convertible senior notes due 2025 (the
"notes"). The size of the offering was increased from the
previously announced $100.0 million
in aggregate principal amount. The notes are to be offered and sold
in a private placement to qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
"Act"). GoPro also granted the initial purchasers of the notes an
option to purchase, within a 13-day period from, and including the
date on which the notes are first issued, up to an additional
$18.75 million aggregate principal
amount of notes. The sale is expected to close on November 24, 2020, subject to customary closing
conditions.
The notes will be senior, unsecured obligations of GoPro. The
notes will bear cash interest at an annual rate of 1.25%, payable
semiannually in arrears on May 15 and
November 15 of each year, beginning
on May 15, 2021. The notes will
mature on November 15, 2025, unless
earlier converted, redeemed or repurchased in accordance with the
terms of the notes. Prior to 5:00
p.m., New York City time,
on the business day immediately preceding August 15, 2025, the notes will be convertible at
the option of holders only upon satisfaction of certain conditions
and during certain periods, and thereafter, at any time until
5:00 p.m., New York City time, on the second scheduled
trading day immediately preceding the maturity date. Upon
conversion, the notes may be settled in shares of GoPro's Class A
common stock (the "common stock"), cash or a combination of cash
and shares of common stock, at the election of GoPro.
The notes will have an initial conversion rate of 107.1984
shares of common stock per $1,000
principal amount of notes (which is subject to adjustment in
certain circumstances). This is equivalent to an initial conversion
price of approximately $9.33 per
share. The initial conversion price represents a premium of
approximately 35.0% to the $6.91 per
share closing price of the common stock on The NASDAQ Global Select
Market on November 19, 2020.
Holders of the notes will have the right to require GoPro to
repurchase for cash all or a portion of their notes at 100% of
their principal amount, plus any accrued and unpaid interest, upon
the occurrence of a fundamental change (as defined in the indenture
relating to the notes). GoPro will also be required to increase the
conversion rate for holders who convert their notes in connection
with certain fundamental changes or a redemption notice, as the
case may be, prior to the maturity date. The notes will be
redeemable, in whole or in part, for cash at GoPro's option at any
time, and from time to time, on or after November 20, 2023, but only if the last reported
sale price per share of the common stock exceeds 130% of the
conversion price for a specified period of time.
GoPro estimates that the net proceeds from the offering will be
approximately $120.7 million (or
approximately $138.9 million if the
initial purchasers exercise their option to purchase additional
notes in full), after deducting the initial purchasers' discount
and estimated offering expenses payable by GoPro. GoPro intends to
use approximately $8.9 million of the
net proceeds to pay the cost of the capped call transactions
described below.
GoPro intends to use approximately $56.2
million of the net proceeds from the offering of the notes
to repurchase $50.0 million aggregate
principal amount, including accrued interest, of its outstanding
3.50% Convertible Senior Notes due 2022 (the "note repurchase"),
which will reduce the outstanding principal amount from
$175.0 million to $125.0 million. The note repurchase and any
associated hedging by holders could have affected the market price
of GoPro's common stock concurrently with the pricing of the notes,
and could have also resulted in higher effective conversion prices
for the notes.
GoPro intends to use the remaining net proceeds for general
corporate purposes, which may include, among other things, repaying
indebtedness and expanding its current business through
acquisitions of, or investments in, other businesses, products or
technologies. However, GoPro has no commitments with respect to any
such acquisitions or investments at this time.
In connection with the pricing of the notes, GoPro entered into
capped call transactions with one or more financial institutions
(the "option counterparties"). The capped call transactions are
expected generally to reduce the potential dilution to the common
stock upon any conversion of the notes and/or offset any cash
payments GoPro 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. If the initial purchasers exercise
their option to purchase additional notes, GoPro expects to enter
into additional capped call transactions with the option
counterparties.
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties and/or their
respective affiliates expect to purchase shares of the common stock
and/or enter into various derivative transactions with respect to
the 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 the common stock or the notes at
that time.
In addition, the option counterparties and/or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the common stock
and/or purchasing or selling the common stock 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/may do so
following any repurchase of notes by GoPro on any fundamental
change repurchase date or otherwise). This activity could also
cause or avoid an increase or a decrease in the market price of the
common stock or the notes, which could affect the holder's ability
to convert the notes and, to the extent the activity occurs during
any observation period related to a conversion of the notes, it
could affect the number of shares and the value of the
consideration that the holder would receive upon conversion of the
notes.
If the initial purchasers exercise their option to purchase
additional notes, GoPro may use the resulting additional proceeds
of the sale of the additional notes to pay the cost of entering
into the additional capped call transactions and for general
corporate purposes, including potential acquisitions and strategic
transactions.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities (including the shares of
the 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.
Any offers of the notes will be made only by means of a private
offering memorandum.
The notes and any shares of the common stock issuable upon
conversion of the notes have not been registered under the Act, 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.
Cautionary Statement Regarding Forward-Looking Statements
This press release may include forward-looking statements within
the meaning Section 27A of the Private Securities Litigation Reform
Act. Words such as "anticipate," "believe," "estimate," "expect,"
"intend," "should," "will" and variations of these terms or the
negative of these terms and similar expressions are intended to
identify these forward-looking statements. Forward-looking
statements in this press release may include but are not limited to
statements regarding the timing and closing of GoPro's offering of
the notes and expected use of net proceeds of the offering. Factors
that may contribute to such differences include, but are not
limited to, risks related to whether GoPro will consummate the
offering of the notes on the expected terms, or at all, whether the
note repurchase will be consummated in the anticipated amount,
whether the capped call transactions will become effective,
prevailing market and other general economic, industry or political
conditions in the United States or
internationally, the impact of COVID-19, whether GoPro will be able
to satisfy the conditions required to close any sale of the notes
and the expected use of the net proceeds from the offering, which
could change as a result of market conditions. The foregoing list
of risks and uncertainties is illustrative, but is not exhaustive.
For information about other potential factors that could affect
GoPro's business and financial results, please review the "Risk
Factors" described in GoPro's Annual Report on Form 10-K for the
year ended December 31, 2019 and
GoPro's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2020 filed with the
Securities and Exchange Commission (the "SEC"), and in GoPro's
other filings with the SEC. These forward-looking statements speak
only as of the date hereof or as of the date otherwise stated
herein. GoPro disclaims any obligation to update these
forward-looking statements.
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SOURCE GoPro, Inc.