Medallia Announces Private Offering of $500 Million of Convertible Senior Notes
September 15 2020 - 6:44AM
Business Wire
Medallia, Inc. (“Medallia”) (NYSE: MDLA) today announced its
intention to offer, subject to market conditions and other factors,
$500 million aggregate principal amount of Convertible Senior Notes
due 2025 (the “notes”) in a private offering (the “offering”) to
persons reasonably believed to be qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”). Medallia also expects to grant the initial
purchasers of the notes a 13-day option to purchase up to an
additional $75 million aggregate principal amount of the notes. The
notes will be senior, unsecured obligations of Medallia, and
interest will be payable semi-annually in arrears. The notes will
be convertible into cash, shares of Medallia’s common stock or a
combination thereof, at Medallia’s election. The interest rate,
initial conversion rate and other terms of the notes are to be
determined upon pricing of the offering.
In connection with the pricing of the notes, Medallia expects to
enter into privately negotiated capped call transactions with one
or more of the initial purchasers or their respective affiliates
and/or other financial institutions (the “option counterparties”).
The capped call transactions will cover, subject to anti-dilution
adjustments, the number of shares of common stock underlying the
notes sold in the offering. The capped call transactions are
expected generally to reduce potential dilution to Medallia’s
common stock upon any conversion of notes and/or offset any cash
payments Medallia 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.
Medallia 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 purchase
shares of Medallia’s 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 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 or other securities of
Medallia 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, repurchase or redemption of the
notes, to the extent Medallia exercises the relevant election under
the capped call transactions). 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 ability of noteholders
to convert the notes and, to the extent the activity occurs
following a conversion or during any observation period related to
a conversion of notes, it could affect the number of shares and
value of the consideration that noteholders will receive upon
conversion of the notes.
Medallia intends to use a portion of the net proceeds from the
offering to pay the cost of the capped call transactions described
above. If the initial purchasers exercise their option to purchase
additional notes, Medallia expects to use a portion of the net
proceeds from the sale of such additional notes to enter into
additional capped call transactions with the option counterparties.
Medallia intends to use the remainder of the net proceeds of the
offering for general corporate purposes, which may include working
capital, capital expenditures, and potential acquisitions and
strategic transactions. However, it has not designated any specific
uses for such remainder of the net proceeds and has no current
agreements with respect to any material acquisition or strategic
transactions.
The notes are being offered to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act. Neither the notes nor the shares of Medallia’s
common stock potentially issuable upon conversion of the notes, if
any, have been, or will be, registered under the Securities Act or
the securities laws of any other jurisdiction, and unless so
registered, may not be offered or sold in the United States except
pursuant to an applicable exemption from such registration
requirements.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities and shall not constitute
an offer, solicitation or sale in any jurisdiction in which such
offer, solicitation or sale is unlawful.
Forward-Looking Statements
This press release includes “forward-looking statements,”
including, but not limited to, whether Medallia will be able to
consummate the offering, the final terms of the offering and the
capped call transactions, prevailing market conditions, and the
anticipated use of net proceeds of the offering of the notes.
Forward-looking statements are subject to known and unknown risks
and uncertainties, and are based on assumptions that may prove to
be incorrect, which could cause actual results to differ materially
from those expected or implied by the forward-looking statements.
All forward-looking statements are subject to other risks detailed
in our Quarterly Report on Form 10-Q for the quarter ended July 31,
2020, filed with the Securities and Exchange Commission, and in
other filings we make with the Securities and Exchange Commission
from time to time. All forward-looking statements in this press
release are based on information available to Medallia as of the
date hereof, and we undertake no obligation to update these
forward-looking statements, except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20200915005687/en/
Investor Relations Carolyn Bass ir@medallia.com
PR Contact: Valerie Beaudett press@medallia.com +1 (650)
400-7833
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