BOSTON, May 10, 2023
/PRNewswire/ -- Wayfair Inc. (NYSE: W) (the "Company,"
"we" or "Wayfair") announced today the pricing of $600 million aggregate principal amount of 3.50%
convertible senior notes due 2028 (the "notes") in a private
offering (the "offering") to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"). In connection with the offering, the
Company granted the initial purchasers an option to purchase,
within a 13-day period beginning on, and including, the initial
issuance date of the notes, up to an additional $90 million aggregate principal amount of
notes.
![Wayfair Logo_2023 (PRNewsfoto/Wayfair Inc.) Wayfair Logo_2023 (PRNewsfoto/Wayfair Inc.)](https://mma.prnewswire.com/media/2008141/Wayfair_Logo.jpg)
The notes will bear interest at a rate of 3.50% per year,
payable semi-annually in arrears on May
15 and November 15 of each
year, beginning November 15, 2023.
The notes will mature on November 15,
2028, unless earlier redeemed, repurchased or converted in
accordance with their terms. Prior to August
15, 2028, the notes will be convertible only upon
satisfaction of certain conditions and during certain periods.
Thereafter, the notes will be convertible at any time until the
close of business on the second scheduled trading day immediately
preceding the maturity date. The Company may not redeem the notes
prior to May 20, 2026. On or after
May 20, 2026, the Company may redeem
for cash all or part of the notes if the last reported sale price
of the Company's Class A common stock has been at least 130% of the
conversion price then in effect for at least 20 trading days
(whether or not consecutive), including at least one of the five
trading days immediately preceding the date on which the Company
provides notice of redemption, during any 30 consecutive trading
day period ending on, and including, the trading day immediately
preceding the date on which the Company provides notice of
redemption. The redemption price will equal 100% of the principal
amount of the notes being redeemed, plus accrued and unpaid
interest to, but excluding, the redemption date.
The notes will be convertible at the option of holders, subject
to certain conditions and during certain periods, into cash, shares
of the Company's Class A common stock or a combination of cash and
shares of the Company's Class A common stock, with the form of
consideration determined at the Company's election. Holders of the
notes will have the right to require the Company to repurchase all
or a portion of their notes at 100% of their principal amount, plus
any accrued and unpaid interest, upon the occurrence of certain
events. The conversion rate will initially be 21.8341 shares of the
Company's Class A common stock per $1,000 principal amount of notes (equivalent to
an initial conversion price of approximately $45.80 per share of the Company's Class A common
stock). The initial conversion price of the notes represents a
premium of approximately 25.0% over the last reported sale price of
the Company's Class A common stock on Tuesday, May 9, 2023, which was $36.64 per share. The sale of the notes is
expected to close on May 12, 2023,
subject to customary closing conditions.
When issued, the notes will be the Company's senior unsecured
obligations and will rank senior in right of payment to any of the
Company's unsecured indebtedness that is expressly subordinated in
right of payment to the notes; equal in right of payment to any of
the Company's existing and future unsecured indebtedness that is
not so subordinated, such as its 1.125% convertible senior notes
due 2024 (the "2024 Notes"), 0.625% convertible senior notes due
2025 (the "2025 Notes"), 2.50% accreting convertible senior notes
due 2025 (the "Accreting 2025 Notes"), 1.00% convertible senior
notes due 2026 and 3.25% convertible senior notes due 2027;
effectively junior in right of payment to any of the Company's
secured indebtedness to the extent of the value of the assets
securing such indebtedness; and structurally junior to all existing
and future indebtedness and other liabilities (including trade
payables) of the Company's subsidiaries, including Wayfair LLC's
guarantee of the Accreting 2025 Notes.
In connection with the pricing of the notes, the Company entered
into privately negotiated capped call transactions with certain of
the initial purchasers or their respective affiliates and certain
other financial institutions (the "option counterparties"). These
capped call transactions are generally expected to reduce the
potential dilution with respect to the Company's Class A common
stock upon any conversion of notes and/or offset any cash payments
the Company is required to make in excess of the principal amount
of converted notes, as the case may be, with such reduction of
potential dilution and/or offset of cash payments subject to a cap.
The cap price of the capped call transactions will initially be
$73.28 per share, which represents a
premium of 100% over the last reported sale price of the Company's
Class A common stock on Tuesday, May 9,
2023 and is subject to certain adjustments under the terms
of the capped call transactions.
The Company 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 the Company's Class A common stock and/or enter
into various derivative transactions with respect to the Company'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 the Company's Class A
common stock or the notes at that time. In addition, the Company
expects that the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the Company's Class A
common stock and/or purchasing or selling the Company's Class A
common stock or other securities of the Company in secondary market
transactions from time to time following the pricing of the notes
and prior to the maturity of the notes (and are likely to do so on
each trading day during the observation period relating to any
conversion of the notes on or after August
15, 2028 that is not in connection with a redemption, or
following the Company's election to terminate any portion of the
capped call transactions in connection with any repurchase,
redemption, exchange or early conversion of the notes). This
activity could also cause or avoid an increase or a decrease in the
market price of the Company's Class A common stock or the notes,
which could affect the ability of holders 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 of the Company's Class A common stock and value of the
consideration that holders will receive upon conversion of the
notes.
In addition, if any such capped call transaction fails to become
effective, whether or not the offering is completed, the option
counterparty party thereto may unwind its hedge positions with
respect to the Company's Class A common stock, which could
adversely affect the value of the Company's Class A common stock
and, if the notes have been issued, the value of the notes.
The Company estimates that the net proceeds from the offering
will be approximately $588.6 million
(or approximately $677.0 million if
the initial purchasers exercise their option to purchase additional
notes in full), after deducting fees and estimated offering
expenses payable by the Company. The Company intends to use
approximately $75.8 million of the
net proceeds from the offering to pay the cost of the capped call
transactions. If the initial purchasers exercise their option to
purchase additional notes, the Company expects to use a portion of
the net proceeds from the sale of the additional notes to enter
into additional capped call transactions. In addition, the Company
also intends to use approximately $513.8
million of the net proceeds from the offering and
approximately $1.0 million of cash on
hand to repurchase for cash approximately $82.5 million in aggregate principal amount of
the 2024 Notes and approximately $534.5
million in aggregate principal amount of the 2025 Notes as
described below. The Company intends to use the remaining net
proceeds, if any, from the offering for working capital and general
corporate purposes, including, but not limited to, operating and
capital expenditures. The Company may also use a portion of such
net proceeds to finance acquisitions, strategic transactions,
investments, repurchases of the Company's Class A common stock or
the repayment, redemption, purchase or exchange of indebtedness
(including its existing convertible notes).
Contemporaneously with the pricing of the notes in the offering,
the Company entered into separate and individually negotiated
transactions (the "concurrent note repurchases") with certain
holders of the 2024 Notes and certain holders of the 2025 Notes to
repurchase approximately $82.5
million in aggregate principal amount of the 2024 Notes for
an aggregate of approximately $77.6
million in cash and approximately $534.5 million in aggregate principal amount of
the 2025 Notes for an aggregate of approximately $436.2 million in cash.
The Company expects that certain holders of the 2024 Notes and
certain holders of the 2025 Notes that the Company agreed to
repurchase that have hedged their equity price risk with respect to
such 2024 Notes and 2025 Notes, respectively (the "hedged
holders"), will, concurrently with or shortly after the pricing of
the new notes, unwind all or part of their hedge positions 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. The repurchase of the 2024 Notes
and the 2025 Notes and the potential related market activities by
holders of the 2024 Notes and the 2025 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 and may have increased the effective conversion price of the
notes. The Company cannot predict the magnitude of such market
activity or the overall effect it will have on the price of the
notes or the Company's Class A common stock.
The notes and the Class A common stock issuable upon conversion
of the notes, if any, are not being registered under the Securities
Act, or the securities laws of any other jurisdiction. The notes
and the Class A common stock issuable upon conversion of the notes,
if any, may not be offered or sold in the
United States except in transactions exempt from, or not
subject to, the registration requirements of the Securities Act and
any applicable state securities laws.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the securities described herein,
nor shall there be any sale of these securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction.
About Wayfair
Wayfair is the destination for all things home: helping
everyone, anywhere create their feeling of home. From expert
customer service, to the development of tools that make the
shopping process easier, to carrying one of the widest and deepest
selections of items for every space, style, and budget, Wayfair
gives everyone the power to create spaces that are just right for
them.
The Wayfair family of brands includes:
- Wayfair: Everything home — for a space that's all you.
- Joss & Main: The ultimate style edit for home.
- AllModern: All of modern, made simple.
- Birch Lane: A fresh take on the classics.
- Perigold: An undiscovered world of luxury design.
- Wayfair Professional: Just right for Pros.
Wayfair generated $12.0 billion
for the twelve months ended March 31,
2023 and is headquartered in Boston, Massachusetts with operations
throughout North America and
Europe.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of federal and state securities laws. All statements
other than statements of historical fact contained in this press
release, including, but not limited to, statements regarding:
whether we will issue the notes; the anticipated use of the net
proceeds of the offering; expectations regarding the effect of the
capped call transactions and the repurchase of the 2024 Notes and
the 2025 Notes; expectations regarding actions of the option
counterparties and their respective affiliates and regarding the
hedged holders; whether the capped call transactions will become
effective; and whether the repurchases of the 2024 Notes and the
2025 Notes will close, are forward-looking statements. In some
cases, you can identify forward-looking statements by terms such as
"may," "will," "should," "expects," "plans," "anticipates,"
"continues," "could," "intends," "goals," "target," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of these terms or other similar
expressions.
Forward-looking statements are based on current expectations of
future events. We cannot guarantee that any forward-looking
statement will be accurate, although we believe that we have been
reasonable in our expectations and assumptions. Investors should
realize that if underlying assumptions prove inaccurate or that
known or unknown risks or uncertainties materialize, actual results
could vary materially from our expectations and projections.
Investors are therefore cautioned not to place undue reliance on
any forward-looking statements. These forward-looking statements
speak only as of the date of this press release and, except as
required by applicable law, we undertake no obligation to publicly
update or revise any forward-looking statements contained herein,
whether as a result of any new information, future events or
otherwise.
A list and description of risks, uncertainties and other factors
that could cause or contribute to differences in our results can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K. We qualify
all of our forward-looking statements by these cautionary
statements.
Media Relations Contact:
Susan
Frechette
PR@Wayfair.com
Investor Relations Contact:
James Lamb
IR@wayfair.com
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SOURCE Wayfair, LLC