Global Payments Inc. (NYSE: GPN) today announced the pricing of
its previously announced offering of $1.75 billion in aggregate
principal amount of its 1.50% convertible senior notes due 2031
(the “Convertible Notes”). The Company granted the initial
purchasers of the Convertible Notes an option to purchase, for
settlement within a 13-day period beginning on, and including, the
first date on which the Convertible Notes are issued, up to an
additional $250 million aggregate principal amount of Convertible
Notes. The offering is expected to close on February 23, 2024,
subject to customary closing conditions.
The Convertible Notes will be senior unsecured obligations of
the Company, and interest will accrue at a rate of 1.50% per annum
from February 23, 2024 and will be payable semi‐annually in arrears
on March 1 and September 1 of each year, beginning on September 1,
2024. The Convertible Notes will mature on March 1, 2031, unless
earlier repurchased, redeemed or converted. Prior to December 1,
2030, the Convertible Notes will be convertible only upon
satisfaction of certain conditions and during certain periods, and
thereafter, the Convertible Notes will be convertible at any time
until the close of business on the second scheduled trading day
immediately preceding the maturity date. The Convertible Notes will
be convertible, on the terms set forth in the indenture, into cash
up to the aggregate principal amount of the Convertible Notes to be
converted and cash, shares of the Company’s common stock or a
combination of cash and shares of the Company’s common stock, at
the Company’s election, in respect of the remainder, if any, of the
Company’s conversion obligation in excess of the aggregate
principal amount of the Convertible Notes being converted. The
conversion rate will initially be 6.3710 shares of common stock per
$1,000 principal amount of Convertible Notes (equivalent to an
initial conversion price of approximately $156.96 per share of the
Company’s common stock). The initial conversion price of the
Convertible Notes represents a premium of approximately 20% to the
$130.80 closing price of the Company’s common stock on February 20,
2024. The conversion rate will be subject to adjustment in certain
circumstances. In addition, following certain corporate events that
occur prior to the maturity date or the Company’s delivery of a
notice of redemption, the Company will increase, in certain
circumstances, the conversion rate for a holder who elects to
convert its Convertible Notes in connection with such a corporate
event or notice of redemption, as the case may be.
The Company may not redeem the Convertible Notes prior to March
6, 2028. The Company may redeem for cash all or part of the
Convertible Notes, at its option, on or after March 6, 2028, if the
last reported sale price of the Company’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 the Company provides notice of redemption at a
redemption price equal to 100% of the principal amount of the
Convertible Notes to be redeemed, plus accrued and unpaid interest
to, but excluding, the redemption date.
If the Company undergoes a fundamental change (as defined in the
indenture governing the Convertible Notes), subject to certain
conditions, holders may require the Company to repurchase for cash
all or part of their Convertible Notes in principal amounts of
$1,000 or an integral multiple thereof. The fundamental change
repurchase price will be equal to 100% of the principal amount of
the Convertible Notes to be repurchased, plus accrued and unpaid
interest, if any, to, but excluding, the fundamental change
repurchase date.
The Company estimates that the aggregate net proceeds from the
offering will be approximately $1.72 billion (or approximately
$1.96 billion if the initial purchasers of the Convertible Notes
exercise their option to purchase additional Convertible Notes in
full), after deducting estimated initial purchasers’ discounts and
estimated offering expenses payable by the Company.
In connection with the pricing of the Convertible Notes, the
Company entered into privately negotiated capped call transactions
with certain of the initial purchasers of the Convertible Notes or
their respective affiliates and certain other financial
institutions (the “option counterparties”). The Company intends to
use $222.25 million of the net proceeds from the offering to pay
the cost of the capped call transactions. The cap price of the
capped call transactions will initially be $228.90 per share, which
represents a premium of 75% over the last reported sale price of
the Company’s common stock of $130.80 per share on February 20,
2024, and will be subject to customary anti-dilution adjustments.
If the initial purchasers of the Convertible Notes exercise their
option to purchase additional Convertible Notes, the Company
expects to use a portion of the net proceeds from the sale of the
additional Convertible Notes to enter into additional capped call
transactions with the option counterparties.
The Company expects to use approximately $185.1 million of the
net proceeds from the offering to repurchase shares of its common
stock from purchasers of the Convertible Notes in privately
negotiated transactions effected with or through one of the initial
purchasers of the Convertible Notes or its affiliate. The purchase
price per share in such transactions will equal $130.80, the
closing price per share of the Company’s common stock on February
20, 2024. These repurchases may have increased, or prevented a
decrease in, the market price of the Company’s common stock or the
Convertible Notes concurrently with the pricing of the Convertible
Notes, and may have resulted in a higher effective conversion price
for the Convertible Notes. The Company intends to use the remainder
of the net proceeds from the offering to repay borrowings and any
accrued and unpaid interest under its commercial paper program, and
also to repay borrowings and any accrued and unpaid interest under
its revolving credit agreement, and any prepayment premium, penalty
or other amount, if any, due in connection with any such repayment,
and for general corporate purposes, including the repayment of
other debt.
The capped call transactions are expected generally to reduce
potential dilution to the Company’s common stock upon conversion of
any Convertible Notes and/or offset any cash payments the Company
is required to make in excess of the principal amount of converted
Convertible Notes, as the case may be, with such reduction and/or
offset subject to a cap.
In connection with establishing their initial hedges of the
capped call transactions, the Company expects the option
counterparties or their respective affiliates to purchase shares of
the Company’s common stock and/or enter into various derivative
transactions with respect to the Company’s common stock
concurrently with or shortly after the pricing of the Convertible
Notes. This activity could increase (or reduce the size of any
decrease in) the market price of the Company’s common stock or the
Convertible 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 Company’s common stock and/or purchasing or
selling shares of the Company’s common stock or other securities of
the Company in secondary market transactions following the pricing
of the Convertible Notes and prior to the maturity of the
Convertible Notes (and are likely to do so on each exercise date
for the capped call transactions or following any termination of
any portion of the capped call transactions in connection with any
repurchase, redemption or early conversion of the Convertible
Notes). This activity could also cause or avoid an increase or
decrease in the market price of the Company’s common stock or the
Convertible Notes, which could affect holders’ ability to convert
the Convertible Notes and, to the extent the activity occurs
following any conversion of the Convertible Notes or during any
observation period related to a conversion of the Convertible
Notes, it could affect the amount and value of the consideration
that holders of the Convertible Notes will receive upon conversion
of such Convertible Notes.
The offer and sale of the Convertible Notes, and any shares of
the Company’s common stock issuable upon conversion of the
Convertible Notes, have not been and will not be registered under
the Securities Act of 1933, as amended (the “Securities Act”), or
any state securities laws, and neither the Convertible Notes nor
any shares of the Company’s common stock issuable upon conversion
of the Convertible Notes may be offered or sold in the United
States absent registration or an applicable exemption from
registration under the Securities Act and any applicable state
securities laws. The Convertible Notes were offered only to persons
reasonably believed to be qualified institutional buyers under Rule
144A under the Securities Act.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy any securities, including the
Convertible Notes or Global Payments’ common stock, nor shall there
be any sale of securities in any state or jurisdiction in which
such an offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
About Global Payments
Global Payments Inc. (NYSE: GPN) is a leading payments
technology company delivering innovative software and services to
our customers globally. Our technologies, services and team member
expertise allow us to provide a broad range of solutions that
enable our customers to operate their businesses more efficiently
across a variety of channels around the world.
Headquartered in Georgia with approximately 27,000 team members
worldwide, Global Payments is a Fortune 500® company and a member
of the S&P 500 with worldwide reach spanning North America,
Europe, Asia Pacific and Latin America.
Forward-Looking Statements
Some of the statements we use in this press release are not
statements of historical or current fact. As such, they are
“forward-looking statements” within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act
of 1934, as amended, including statements concerning the timing and
completion of the offering of the Convertible Notes, the capped
call transactions and the anticipated use of proceeds from the
offering. We have based these forward-looking statements on our
current plans and expectations, and these statements are subject to
known and unknown risks, uncertainties and assumptions. Actual
events or results might differ materially from those expressed or
forecasted in these forward-looking statements. Accordingly, we
cannot guarantee that our plans and expectations will be achieved.
Although it is not possible to create a comprehensive list of all
factors and risks that may cause actual results to differ from the
results expressed or implied by our forward-looking statements or
that may affect our future results, the following factors, among
others, could cause actual results and the timing of events to
differ materially from the anticipated results or other
expectations expressed in the forward-looking statements: the
satisfaction of customary closing conditions related to the
offering; uncertainties and other factors relating to the intended
use of proceeds from the offering and sale of the Convertible
Notes. Although we believe that the plans and expectations
reflected in any forward-looking statements are based on reasonable
assumptions, we can give no assurance that our plans and
expectations will be attained, and therefore actual outcomes and
results may differ materially from what is expressed or forecasted
in such forward-looking statements. These forward-looking
statements are subject to numerous risks and uncertainties,
including those identified elsewhere in this communication and
those included in the “Risk Factors” section in our most recent
Annual Report on Form 10-K and in other documents that we file with
the SEC, which are available at https://www.sec.gov.
These cautionary statements qualify all of our forward-looking
statements, and you are cautioned not to place undue reliance on
these forward-looking statements. Our forward-looking statements
speak only as of the date they are made and should not be relied
upon as representing our plans and expectations as of any
subsequent date. While we may elect to update or revise
forward-looking statements at some time in the future, we
specifically disclaim any obligation to publicly release the
results of any revisions to our forward-looking statements, except
as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20240220511053/en/
Media Contact: Emily Edmonds +1 770.829.8755
media.relations@globalpay.com
Investor Contact: Winnie Smith +1 770.829.8478
investor.relations@globalpay.com
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