Huron Consulting Group Prices Private Offering of $225 Million of Convertible Senior Notes Due 2019
The Convertible Notes will pay interest semiannually at an annual rate
of 1.25% and will be convertible into cash, shares of the Company's
common stock or a combination thereof, at the Company's election, based
on the applicable conversion rate. The Convertible Notes have an initial
conversion rate of 12.5170 shares of the Company's common stock per
In connection with the pricing of the Convertible Notes, the Company
entered into privately negotiated convertible note hedge transactions
with one or more of the initial purchasers or their respective
affiliates (in this capacity, the "hedge counterparties"). The
convertible note hedge transactions cover, subject to customary
anti-dilution adjustments, the number of shares of common stock
initially underlying the Convertible Notes sold in the offering. The
Company also entered into separate, privately negotiated warrant
transactions with the hedge counterparties relating to the same number
of shares of the Company's common stock, subject to customary
anti-dilution adjustments, with an initial strike price of approximately
The convertible note hedge transactions are intended to generally reduce the potential dilution with respect to the Company's common stock and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be, upon any conversion of the Convertible Notes in the event that the price per share of the Company's common stock is greater than the strike price of the convertible note hedge transactions. The Company expects that to the extent the price per share of the Company's common stock exceeds the strike price of the warrants, the warrant transactions could separately have a dilutive effect with respect to the Company's common stock.
The Company estimates that it will receive net proceeds from the
offering of approximately
The Company intends to use:
$16.65 millionof the net proceeds of the offering to fund the cost of entering into the convertible note hedge transactions (after such cost is partially offset by the proceeds that it receives from entering into the warrant transactions);
$25 millionof the net proceeds of the offering to repurchase shares of the Company's common stock concurrently with the offering from purchasers of the Convertible Notes; and
- the remainder of the net proceeds of the offering for working capital and general corporate purposes.
The Company may also use a portion of the net proceeds to acquire businesses through one or more acquisitions or other strategic transactions. However, the Company has no current commitments or obligations with respect to any acquisitions or other strategic transactions.
If the initial purchasers exercise their option to purchase additional notes, the Company intends to use a portion of the additional net proceeds to fund the cost of entering into additional convertible note hedge transactions (which cost will be partially offset by the proceeds that it expects to receive from entering into additional warrant transactions). The Company intends to use the remainder of such net proceeds for working capital, acquisitions, and general corporate purposes.
The Company has been advised by the hedge counterparties that in connection with establishing their initial hedge position with respect to the convertible note hedge transactions and warrant transactions, the hedge counterparties and/or their respective affiliates expect to enter into various derivative transactions with respect to the Company’s common stock and/or purchase shares of the Company’s common stock in privately negotiated transactions and/or open market transactions 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.
The Company has also been advised by the hedge counterparties that the hedge counterparties or their respective affiliates are likely to modify their hedge positions by entering into or unwinding various derivative transactions with respect to the Company’s common stock and/or purchasing or selling the Company’s common stock or other of the Company’s securities or instruments, including the Convertible Notes in secondary market transactions following the pricing of the Convertible Notes and prior to the maturity of the Convertible Notes.
This press release is neither an offer to sell nor a solicitation of an offer to buy the Convertible Notes or any shares of common stock issuable upon conversion of the Convertible Notes, 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.
The offer and sale of the Convertible Notes and any common stock
issuable upon conversion of the Convertible Notes have not been
registered under the Securities Act, or the securities laws of any other
jurisdiction, and the Convertible Notes and any such shares may not be
offered or sold in
The convertible note hedge transactions and warrant transactions have
not been and will not be registered under the Securities Act or the
securities laws of any other jurisdiction and may not be offered or sold
Statements in this press release that are not historical in nature,
including those concerning the Company’s current expectations about its
future requirements and needs, are “forward-looking” statements as
defined in Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) and the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are identified by words
such as “may,” “should,” “expects,” “provides,” “anticipates,”
“assumes,” “can,” “will,” “meets,” “could,” “likely,” “intends,”
“might,” “predicts,” “seeks,” “would,” “believes,” “estimates,” “plans”
or “continues.” These forward-looking statements reflect our current
expectations about our future requirements and needs, results, levels of
activity, performance, or achievements, including, without limitation,
current expectations with respect to, among other factors, utilization
rates, billing rates, and the number of revenue-generating
professionals; that we are able to expand our service offerings; that we
successfully integrate the businesses we acquire; and that existing
market conditions continue to trend upward. These statements involve
known and unknown risks, uncertainties and other factors, including,
among others, those described under “Item 1A. Risk Factors” in our
Annual Report on Form 10-K for the year ended
Huron Consulting Group Inc.
Jennifer Frost Hennagir
C. Mark Hussey