Earlier this week Concur Inc. (CNQR) announced an offer to sell new senior unsecured notes due 2018. But the prices and other terms of issue were subject to negotiations between Concur and the initial purchasers. On May 30, 2013 Concur announced its decisions regarding the prices and other specifications.
The interest rate has been set at 0.50% per annum that will be paid semi-annually in cash. The offer is set to expire on Jun 4, 2013. The company has also revised the size of the offering from $350 million to $425 million of aggregate principal amount. The over-allotment option that was earlier decided at $52.5 million has also been increased to $63.75 million. The notes are scheduled to mature on Jun 15, 2018.
It was decided earlier that these convertible notes would be sold through private placement amongst institutional buyers. They will be able to use their conversion rights prior to March 15, 2018. The initial conversion rate was set at 9.5377 shares of common stock per $1,000 principal amount of notes. This rate equates to a conversion price of approximately $104.85 per share, which is at a premium of 30.14% to Concur’s closing price of $ 80.57 as on May 30, 2013.
Concur expects net proceeds of $413 million to $475 million from the offering (excluding discounts and expenses) depending on fulfillment of over-allotment options. Of this amount, Concur intends to use $29.9 for repaying the convertible note hedge transactions.
Concur presently has a Zacks Rank #3 (Hold). Some other companies in the industry worth considering at the moment are Aspen Technology, Inc. (AZPN), Pegasystems Inc. (PEGA) and SAP AG (SAP), all having a Zacks Rank #1 (Strong Buy).
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