BALTIMORE, May 22, 2020 /PRNewswire/ -- Under Armour,
Inc. (NYSE: UA, UAA) today announced that it has priced
$440 million aggregate principal
amount of its 1.50% convertible senior notes due 2024 (the
"notes"), which represents an increase of $40 million from the offering size previously
announced. The notes are being sold in a private 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"). Under Armour has also granted the initial
purchasers of the notes an option to purchase, within a thirteen
day period beginning on, and including, the first date on which the
notes are issued, up to an additional $60
million aggregate principal amount of the notes. The sale of
the notes is expected to close on May 27,
2020, subject to customary closing conditions.
The notes will be senior, unsecured obligations of Under Armour,
bearing interest at a rate of 1.50% per annum, payable semiannually
in arrears. The notes will mature on June 1,
2024 unless they are redeemed, repurchased or converted
prior to such date. Prior to January 1,
2024, the notes will be convertible at the option of holders
only during certain periods and upon satisfaction of certain
conditions. On or after January 1,
2024, the notes will be convertible at the option of the
holders 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 Under Armour
Class C common stock, cash or a combination thereof, at Under
Armour's election.
Under Armour may redeem all or any portion of the notes, at its
option, on or after December 6, 2022,
at a cash redemption price equal to 100% of the principal amount of
the notes to be redeemed, plus any accrued and unpaid interest to,
but excluding the redemption date, if the last reported sale price
of Under Armour Class C common stock has been at least 130% of the
conversion price then in effect for a specified period of time
ending on, and including, the trading day immediately before the
date the notice of redemption is sent.
Holders of notes may require Under Armour to repurchase their
notes upon the occurrence of certain events that constitute a
fundamental change under the indenture governing the notes at 100%
of their principal amount, plus any accrued and unpaid interest to,
but excluding, the date of repurchase. In connection with certain
corporate events or if Under Armour calls any note for redemption,
it will, under certain circumstances, be required to increase the
conversion rate for holders who elect to convert their notes in
connection with such corporate event or notice of redemption.
The notes will have an initial conversion rate of 101.8589
shares of Class C common stock per $1,000 principal amount of notes, which will be
subject to customary anti-dilution adjustments in certain
circumstances. This represents an initial conversion price of
approximately $9.82 per share, which
represents a premium of approximately 27.5% to the $7.70 last reported share price of Under Armour
Class C common stock on the New York Stock Exchange on May 21, 2020.
Under Armour estimates that the net proceeds from the offering
will be approximately $429.1 million
(or approximately $487.8 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 Under Armour. Under Armour
intends to use approximately $42.1
million (or approximately $47.9
million if the initial purchasers exercise their option to
purchase additional notes in full) of the net proceeds from the
offering of the notes to pay the cost of the capped call
transactions described below. Under Armour intends to use the
remaining net proceeds from the offering to repay indebtedness
outstanding under its revolving credit facility and pay related
fees and expenses.
In connection with the pricing of the notes, Under Armour 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 are expected generally to reduce potential
dilution to Under Armour Class C common stock upon conversion of
the notes and/or offset the potential cash payments that Under
Armour 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. The cap
price of the capped call transaction is initially $13.4750 per share of Under Armour Class C common
stock, representing a premium of 75% above the last reported sale
price of $7.70 per share of Under
Armour Class C common stock on May 21,
2020, and is subject to certain adjustments under the terms
of the capped call transactions. If the initial purchasers exercise
their option to purchase additional notes, Under Armour expects to
enter into additional capped call transactions with the capped call
counterparties that are expected generally to offset potential
dilution and/or potential cash payments relating to additional
notes issued upon exercise of the option to purchase additional
notes.
In connection with establishing their initial hedges of the
capped call transactions, the capped call counterparties have
advised Under Armour that they and/or their respective affiliates
expect to enter into various derivative transactions with respect
to Under Armour Class C common stock and/or purchase Under Armour
Class C 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 Under Armour Class C
common stock or the notes at that time.
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 Under Armour
Class C common stock and/or purchasing or selling Under Armour
Class C common stock, the notes or other of Under Armour's
securities or instruments (if any) 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 a note). This activity could affect the
market price of Under Armour Class C 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
Under Armour Class C 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 (and the shares of Under
Armour Class C common stock, if any, into which the notes are
convertible) will be made only to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A promulgated
under the Securities Act, by means of a private offering
memorandum.
The offer and sale of the notes and any shares of Under Armour
Class C common stock issuable upon conversion of the notes have not
been registered under the Securities Act, or any state securities
laws, and the notes and any such shares may not be offered or sold
in the United States absent
registration or an applicable exemption from such registration
requirements.
About Under Armour, Inc.
Under Armour, Inc., headquartered in Baltimore, Maryland, is a leading inventor,
marketer and distributor of branded athletic performance apparel,
footwear and accessories. Powered by one of the world's largest
digitally connected fitness and wellness communities, Under
Armour's innovative products and experiences are designed to help
advance human performance, making all athletes better.
Forward-Looking Statements
Some of the statements contained in this press release
constitute forward-looking statements. Forward-looking statements
relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts, such as
statements regarding Under Armour's expectations related to the
offering discussed in this press release. In many cases, you can
identify forward-looking statements by terms such as "may," "will,"
"should," "expects," "plans," "assumes," "anticipates," "believes,"
"estimates," "predicts," "outlook," "potential" or the negative of
these terms or other comparable terminology. The forward-looking
statements contained in this press release reflect Under Armour's
current views about future events and are subject to risks,
uncertainties, assumptions and changes in circumstances that may
cause events or Under Armour's actual activities or results to
differ significantly from those expressed in any forward-looking
statement. Although Under Armour believes that the expectations
reflected in the forward-looking statements are reasonable, it
cannot guarantee future events, results, actions, levels of
activity, performance or achievements. Readers are cautioned not to
place undue reliance on these forward-looking statements. Under
Armour discusses many of these risks in greater detail under the
heading "Risk Factors" in the quarterly and annual reports that
Under Armour files with the Securities and Exchange Commission
(SEC). The forward-looking statements contained in this press
release reflect Under Armour's views and assumptions only as of the
date of this press release. Under Armour undertakes no obligation
to update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events.
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SOURCE Under Armour, Inc.