SAN MATEO, Calif., June 9, 2020 /PRNewswire/ -- Coupa Software
(NASDAQ: COUP) today announced that it proposes to offer
$1.1 billion aggregate principal
amount of convertible senior notes due 2026 (the "notes"), subject
to market conditions and other factors. The notes are to be offered
and sold only to persons reasonably believed to be qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended. Coupa also intends to grant to the initial
purchasers of the notes an option to purchase up to an additional
$165 million aggregate principal
amount of the notes.
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The notes will be senior, unsecured obligations of Coupa, and
interest will be payable semi-annually in cash on June 15 and December
15 of each year, beginning on December 15, 2020. The notes will mature on
June 15, 2026 unless redeemed,
repurchased or converted prior to such date. Prior to March 15, 2026, the notes will be convertible at
the option of holders during certain periods, upon satisfaction of
certain conditions. 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. Upon
conversion, the notes may be settled in shares of Coupa common
stock, cash or a combination of cash and shares of Coupa common
stock, at Coupa's election.
The interest rate, initial conversion rate, offering price, and
other terms are to be determined by negotiations between Coupa and
the initial purchasers.
Coupa expects to use the net proceeds from the offering (1) to
repurchase for cash a portion of its outstanding convertible notes
due 2023 (the "2023 notes"), (2) to pay the cost of the capped call
transactions as described below and (3) for general corporate
purposes, potential acquisitions, strategic transactions and
working capital.
If the initial purchasers exercise their option to purchase
additional notes, Coupa intends to use a portion of the net
proceeds from the sale of the additional notes to enter into
additional capped call transactions with the capped call
counterparties and for general corporate purposes.
Coupa may redeem all or any portion of the notes, at its option,
on or after June 20, 2023 and prior
to the 21st scheduled trading day immediately preceding the
maturity date, at a redemption price equal to 100% of the principal
amount of the notes to be redeemed, plus accrued and unpaid
interest thereon, if the last reported sale price of Coupa's common
stock has been at least 130% of the conversion price then in effect
for at least 20 trading days (whether or not consecutive) during
any 30 consecutive trading day period (including the last trading
day of such period) ending on, and including, the trading day
immediately preceding the date on which Coupa provides written
notice of redemption.
Holders of notes may require Coupa to repurchase their notes
upon the occurrence of certain events that constitute a fundamental
change under the indenture governing the notes at a purchase price
equal to 100% of the principal amount thereof, plus accrued and
unpaid interest to, but excluding, the date of repurchase. In
connection with certain corporate events or if Coupa issues a
notice of redemption, it will, under certain circumstances,
increase the conversion rate for holders who elect to convert their
notes in connection with such corporate event or during the
relevant redemption period.
In connection with the pricing of the notes, Coupa expects to
enter into privately negotiated capped call transactions with one
or more of the initial purchasers of the notes and/or their
respective affiliates and/or other financial institutions (the
"capped call counterparties"). The capped call transactions will
initially cover, subject to customary anti-dilution adjustments,
the number of shares of Coupa common stock that will initially
underlie the notes, assuming the initial purchasers do not exercise
their option to purchase additional notes. The capped call
transactions are expected generally to reduce or offset potential
dilution to holders of Coupa's common stock upon conversion of the
notes and/or offset the potential cash payments that Coupa 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. If the initial purchasers
of the notes exercise their option to purchase additional notes,
Coupa intends to enter into additional capped call transactions
with capped call counterparties that would initially cover, subject
to customary anti-dilution adjustments, the number of shares of
Coupa common stock that will initially underlie the notes purchased
by the initial purchasers pursuant to their option to purchase
additional notes.
In connection with establishing their initial hedge of the
capped call transactions, the capped call counterparties have
advised Coupa that they and/or their respective affiliates expect
to enter into various derivative transactions with respect to Coupa
common stock and/or purchase Coupa 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 Coupa common stock or the notes concurrently with, or shortly
after, the pricing of the notes.
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 Coupa common
stock and/or purchasing or selling Coupa common stock in secondary
market transactions following the pricing of the notes and prior to
the maturity of the notes. This activity could decrease (or avoid
an increase in) the market price of Coupa 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.
In connection with any repurchase of the 2023 notes (the
"repurchase transactions"), Coupa expects that holders of the
outstanding 2023 notes that are being repurchased and have hedged
their equity price risk with respect to such notes (the "hedged
holders") will, concurrently with the pricing of the notes, unwind
their hedge positions by buying Coupa stock and/or entering into or
unwinding various derivative transactions with respect to Coupa
stock. The amount of Coupa common stock to be purchased by the
hedged holders is likely to be substantial in relation to the
historic average daily trading volume of Coupa common stock. If it
is, this activity by the hedged holders will increase the effective
conversion price of the 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
Coupa 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.
The notes and any shares of common stock issuable upon
conversion of the notes have not been registered under the
Securities Act of 1933, as amended, 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.
Forward-Looking Statements
This press release contains forward-looking statements
including, among other things, statements relating to Coupa's
intention to offer the notes, the timing of the proposed offering,
the proposed terms of the offering and the intended use of the net
proceeds from the offering, including the note repurchase
transactions. These forward-looking statements are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements involve risks and
uncertainties that could cause actual results to differ materially,
including, but not limited to, whether or not Coupa will offer the
notes or consummate the offering or the repurchase transactions,
the final terms of the offering, the impact of general economic,
industry or political conditions and the COVID-19 pandemic in
the United States or
internationally, prevailing market conditions, the anticipated
principal amount of the notes, which could differ based upon market
conditions, the anticipated use of the net proceeds of the
offering, which could change as a result of market conditions or
for other reasons, and whether or not the capped call transactions
will be entered into or become effective.
Coupa assumes no obligation to, and does not currently intend
to, update any such forward-looking statements after the date of
this release.
About Coupa Software
Coupa Software is a leading provider of business spend
management (BSM) solutions. We offer a comprehensive, cloud-based
BSM platform that has connected our global community of customers
with more than five million suppliers around the world. Our
platform provides greater visibility into and control over how
companies spend money. Using our platform, businesses are able to
achieve real, measurable value and savings that drive their
profitability.
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SOURCE Coupa Software