Envestnet Raises $486M Via Upsized Private Institutional Debt To Repurchase Outstanding Convertible Notes

Envestnet, Inc ENV priced $500 million of 2.625% convertible notes due 2027 in an upsized private institutional offering.
The provider of intelligent systems for wealth management and financial wellness raised the offering size from the previously announced offering size of $350 million.
The company also granted the initial purchasers of the Notes an option to purchase, for settlement, within 13 days to cover over-allotments, up to an additional $75 million of Notes.
The Notes will mature on December 1, 2027. Interest will accrue on the Notes at a rate of 2.625% per year and will be payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2023.
The initial conversion rate for the Notes represents a premium of approximately 32.5% over the last reported sale price of $55.37 on November 14, 2022.
The company entered into privately negotiated capped call transactions with certain initial purchasers or affiliates.
The cap price of the capped call transactions represents a premium of 100% over the last reported sale price of $55.37.
The company estimates net proceeds of $485.5 million or approximately $558.4 million, assuming the initial purchasers exercise their option to purchase additional Notes in full.
The company intends to use $494.2 million of the net proceeds plus available cash to repurchase for cash a portion of its outstanding convertible notes.
The company expects to use $69.1 million of the net proceeds from this offering to pay the cost of entering into the capped call transactions.
In addition, the company entered into transactions with certain holders of 1.75% convertible notes due 2023 and the 0.75% convertible notes due 2025 to repurchase $300.0 million of the 2023 Convertible Notes for $312.4 million plus accrued interest in cash and $200.0 million of the 2025 Notes for $181.8 million in cash plus accrued interest.
Envestnet held $241.3 million in cash and cash equivalents and $862.5 million in outstanding debt as of September 30.
Price Action: ENV shares closed higher by 2.96% at $57.07 on Tuesday.

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