AUSTIN, Texas--(BUSINESS WIRE)--
Q2 Holdings, Inc. (NYSE: QTWO), a provider of secure, cloud-based
virtual banking solutions, today announced that it intends to offer,
subject to market conditions and other factors, $200 million aggregate
principal amount of convertible senior notes due 2023 (the “Convertible
Notes”) in a private placement to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”). The Company expects to grant an option to the initial
purchasers to purchase up to an additional $30 million aggregate
principal amount of Convertible Notes.
The Convertible Notes will be unsecured, unsubordinated obligations of
the Company and are expected to pay interest semiannually. The
Convertible Notes will mature on Feb. 15, 2023, unless repurchased or
converted in accordance with their terms prior to such date. Prior to
Nov. 15, 2022, the Convertible Notes will be convertible only upon the
satisfaction of certain conditions and during certain periods, and
thereafter at any time prior to the close of business on the second
scheduled trading day immediately preceding the maturity date regardless
of these conditions. The Convertible Notes will be convertible into
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. The
initial conversion rate, interest rate and other terms of the
Convertible Notes will be determined at the time of pricing in
negotiations with the initial purchasers of the Convertible Notes.
In connection with the offering, the Company intends to enter into
privately negotiated convertible note hedge transactions with one or
more financial institutions, which may include one or more of the
initial purchasers and/or their respective affiliates (in this capacity,
the “option counterparties”). The convertible note hedge transactions
will cover, subject to anti-dilution adjustments, the number of shares
of common stock underlying the Convertible Notes sold in the offering.
The Company also intends to enter into privately negotiated warrant
transactions with the option counterparties whereby the Company will
sell to the option counterparties warrants to purchase (subject to net
share settlement provisions) up to the same number of shares of the
Company’s common stock, subject to customary anti-dilution adjustments.
If the initial purchasers exercise their option to purchase additional
notes, the Company may enter into additional convertible note hedge
transactions and additional warrant transactions with the option
counterparties. The convertible note hedge transactions are generally
expected to reduce potential dilution to the Company’s common stock upon
conversion of the Convertible Notes and/or offset any cash payments the
Company is required to make in excess of the principal amount of
converted notes, as the case may be. The warrant transactions could have
a dilutive effect on the Company’s common stock to the extent that the
market price per share of the Company’s common stock exceeds the strike
price of the warrants unless the Company elects to cash settle the
warrants.
The Company intends to use a portion of the net proceeds of the offering
to pay the cost of the convertible note hedge transactions (after such
cost is partially offset by the proceeds that it receives from the sale
of warrants pursuant to the warrant transactions). The Company intends
to use the remainder of the net proceeds from the offering for general
corporate purposes, including working capital, capital expenditures,
potential acquisitions and strategic transactions; however, the Company
has not designated any specific uses and has no current agreements with
respects to any material acquisition or strategic transactions. If the
initial purchasers exercise their option to purchase additional notes,
the Company intends to use a portion of the net proceeds to fund the
cost of entering into additional convertible note hedge transactions.
Any remaining net proceeds from the sale of additional notes will be
used for general corporate purposes.
The Company has been advised that, in connection with establishing their
initial hedge positions with respect to the convertible note hedge
transactions and the warrant transactions, the option counterparties
and/or their affiliates (i) expect to purchase shares of the Company’s
common stock and/or enter into derivative transactions with respect to
the Company’s common stock concurrently with, or shortly after, the
pricing of the Convertible Notes and (ii) may modify their hedge
positions by entering into or unwinding derivative transactions with
respect to the Company’s common stock and/or purchasing or selling 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. These activities could
have the effect of increasing, or preventing a decline in, the market
price of the Company’s common stock concurrently with, or shortly
following, the pricing of the Convertible Notes. The effect, if any, of
these activities, including the direction or magnitude, on the market
price of the Company’s common stock will depend on a variety of factors,
including market conditions, and cannot be ascertained at this time. Any
of these activities could, however, adversely affect the market price of
the Company’s common stock.
This press release is neither an offer to sell nor a solicitation of an
offer to buy the Convertible Notes or the shares of common stock
issuable upon conversion of the Convertible Notes, if any, nor shall
there be any sale of these securities in any state or jurisdiction in
which such an offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such
state or jurisdiction. Any offer of these securities will be made only
by means of a private offering memorandum.
The Convertible Notes and the shares of common stock issuable upon
conversion of the Convertible Notes, if any, have not been registered
under the Securities Act, or the securities laws of any other
jurisdiction, and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
Forward-looking Statements:
This press release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995
regarding the planned offering. Words such as “anticipates,”
“estimates,” “expects,” “projects,” “forecasts,” “intends,” “plans,”
“will,” “believes” and words and terms of similar substance used in
connection with any discussion identify forward-looking statements.
These forward-looking statements are based on management’s current
expectations and beliefs about future events and are inherently
susceptible to uncertainty and changes in circumstances. Except as
required by law, the Company is under no obligation to, and expressly
disclaim any obligation to, update or alter any forward-looking
statements whether as a result of such changes, new information,
subsequent events or otherwise. With respect to the planned offering,
such uncertainties and circumstances include whether the Company will
offer the notes or consummate the offering; the anticipated terms of the
notes and the use of the net proceeds from the offering; and whether the
convertible note hedge and warrant transactions will become effective.
Various factors could also adversely affect the Company’s operations,
business or financial results in the future and cause the Company’s
actual results to differ materially from those contained in the
forward-looking statements, including those factors discussed in detail
in the “Risk Factors” sections contained in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2017 filed with the
Securities and Exchange Commission and available on the SEC Filings
section of the Investor Services section of Q2’s website at http://investors.q2ebanking.com/.
About Q2 Holdings, Inc.
Q2 is a leading provider of secure, experience-driven digital banking
solutions headquartered in Austin, Texas. We are driven by a mission to
build stronger communities by strengthening their financial
institutions. Q2 provides the industry’s most comprehensive digital
banking platform, enriched through actionable data insights, open
development tools and an evolving fintech ecosystem. We help clients
elevate the experience, drive efficiency and grow faster.
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Source: Q2 Holdings, Inc.