Recently Concur Technologies Inc. announced its plan to offer unsecured and convertible senior notes worth $350 million of principal amount in aggregate due in 2018. The notes will be sold through private placement amongst institutional buyers.
The interest payment will be made semi-annually. The relevant rates, prices and terms of the offer will be decided by way of negotiations between Concur and the initial purchasers.
However, these notes will not be subordinated to the company’s credit facilities or obligations. Concur will use the proceeds from the private placement to finance its general corporate expenses and multiple strategic transactions, including strategic acquisitions.
A part of the money will also be utilized to meet the convertible note hedge transaction, which the company plans to enter into with some of the initial purchasers to limit investment risk. Concur also expressed its intentions to enter into separate warrant transactions, proceeds of which will be used to partly pay the charges for the hedge transaction.
The hedging transaction might require the parties to this contract to purchase stocks of Concur at pre-determined prices.
Apart from the initial amount of $350 million, Concur will also allow its initial purchasers to make an additional purchase of notes of an aggregate principal amount of $52.5 million to cover over-allotment options. The notes will be convertible into cash up to the principal amount and into shares of company’s common stock for any excess conversion value.
Concur presently has a Zacks Rank #3 (Hold). Some other companies in the industry worth considering at the moment are Aspen Technology, Inc. (AZPN - Snapshot Report), Pegasystems Inc. (PEGA - Snapshot Report) and SAP AG (SAP - Analyst Report), all having Zacks Rank #1 (Strong Buy)