|
Item 1.01
|
Entry into a Material Agreement.
|
On September 17,
2021, Jamf Holding Corp. (the “Company”) completed its previously announced private offering of $325.0 million aggregate
principal amount of 0.125% Convertible Senior Notes due 2026 (the “Notes”), including the exercise in full of the
initial purchasers’ option to purchase up to an additional $48.75 million aggregate principal amount of the Notes. The Notes
were issued pursuant to an indenture, dated September 17, 2021 (the “Indenture”), among the Company, JAMF Software,
LLC, as subsidiary guarantor, and U.S. Bank National Association, as trustee.
The Notes are general senior,
unsecured obligations of the Company and will mature on September 1, 2026, unless earlier converted redeemed, or repurchased. The
Notes will bear interest at a rate of 0.125% per year, payable semiannually in arrears on March 1 and September 1 of each year,
beginning on March 1, 2022.
JAMF Software, LLC, a wholly-owned
subsidiary of the Company (the “subsidiary guarantor”) unconditionally guaranteed the Company's payment obligations under
the Notes (the “subsidiary guarantee”). The subsidiary guarantee ranks equally in right of payment with all existing and future
liabilities of the subsidiary guarantor that are not subordinated. The subsidiary guarantee effectively ranks junior to any secured indebtedness
of the subsidiary guarantor to the extent of the value of the assets securing such indebtedness. In addition, the subsidiary guarantor
has, and may in the future have, secured indebtedness which would cause the Notes to be effectively junior in right of payment to any
such secured indebtedness to the extent of the value of the assets securing such indebtedness. Under the terms of the full and unconditional
guarantee, holders of the Notes are not required to exercise their remedies against the Company before they proceed directly against the
subsidiary guarantor. The Indenture limits the subsidiary guarantor's ability to consolidate with or merge with or into, or sell, convey,
transfer or lease all or substantially all of the consolidated properties and assets of it and its subsidiaries, taken as a whole, to,
another person (other than the Company), subject to certain exceptions.
The subsidiary guarantee
will be automatically released:
|
(1)
|
in connection with any sale, conveyance or transfer of all or substantially all of the consolidated properties and assets of the subsidiary
guarantor and its subsidiaries, taken as a whole (including by way of consolidation or merger) (other than to the Company);
|
|
(2)
|
in connection with any sale, disposition or transfer of all of the capital stock of the subsidiary guarantor to a person (other than
to the Company); or
|
|
(3)
|
upon satisfaction and discharge of the Indenture as provided therein.
|
The obligations of the subsidiary
guarantor under the subsidiary guarantee will be limited as necessary to prevent the subsidiary guarantee from constituting a fraudulent
conveyance or fraudulent transfer under applicable law.
The Notes are convertible
at the option of the holders at any time prior to the close of business on the business day immediately preceding March 1, 2026,
only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31,
2021 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading
days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the
immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during
the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading
price (as defined in the Indenture) per $1,000 principal amount of the Notes for each trading day of the measurement period was less than
98% of the product of the last reported sale price of the Company’s common stock and the conversion rate for the Notes on each such
trading day; (3) if the Company calls such Notes for redemption, at any time prior to the close of business on the scheduled trading
day immediately preceding the redemption date, but only with respect to the Notes called (or deemed called) for redemption; and (4) upon
the occurrence of specified corporate events as set forth in the Indenture. On or after March 1, 2026 until the close of business
on the second scheduled trading day immediately preceding the maturity date (September 1, 2026), holders of the Notes may convert
all or any portion of their Notes at any time, regardless of the foregoing conditions. Upon conversion, the Company may satisfy its conversion
obligation by paying or delivering, as the case may be, 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, in the manner and subject to the terms and conditions provided
in the Indenture.
The conversion rate for
the Notes will initially be 20.0024 shares of the Company’s common stock per $1,000 principal amount of Notes, which is
equivalent to an initial conversion price of approximately $49.99 per share of common stock. The initial conversion price of the
Notes represents a premium of approximately 40.0% to the last reported sale price of the Company’s common stock on The Nasdaq
Global Select Market on September 14, 2021. The conversion rate for the Notes is subject to adjustment under certain
circumstances in accordance with the terms of the Indenture. In addition, following certain corporate events that occur prior to the
maturity date of the Notes or if the Company delivers a notice of redemption in respect of the Notes, the Company will, under
certain circumstances, increase the conversion rate of the Notes for a holder who elects to convert its Notes (or any portion
thereof) in connection with such a corporate event or convert its Notes called (or deemed called) for redemption during the related
redemption period (as defined in the Indenture), as the case may be.
The Company may not redeem
the Notes prior to September 6, 2024. The Company may redeem for cash all or any portion of the Notes, at its option, on or after
September 6, 2024, if the last reported sale price of the common stock has been at least 130% of the conversion price for the Notes
then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last
trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice
of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid
interest, to, but excluding, the redemption date. If the Company redeems less than all the outstanding Notes, at least $50 million
aggregate principal amount of Notes must be outstanding and not subject to redemption as of the date of the relevant notice of redemption.
No sinking fund is provided for the Notes.
If the Company
undergoes a fundamental change (as defined in the Indenture), holders may require, subject to certain conditions and exceptions, the
Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the
principal amount of the Notes to be repurchased, plus accrued and unpaid interest, to, but excluding, the
fundamental change repurchase date.
The Indenture includes customary
covenants and sets forth certain events of default after which the Notes may be declared immediately due and payable and sets forth certain
types of bankruptcy or insolvency events of default involving the Company or its significant subsidiaries after which the Notes become
automatically due and payable. The following events are considered “events of default” under the Indenture:
|
·
|
default in any payment of interest on any Note when due and payable and the default continues for a period of 30 days;
|
|
·
|
default in the payment of principal of any Note when due and payable at its stated maturity, upon optional redemption, upon any required
repurchase, upon declaration of acceleration or otherwise;
|
|
·
|
failure by the Company to comply with its obligation to convert the Notes in accordance with the Indenture upon exercise of a holder’s
conversion right, and such failure continues for three business days;
|
|
·
|
failure by the Company to give (i) a fundamental change notice or notice of a make-whole fundamental change, and such failure
continues for two business days or (ii) notice of certain specified corporate events, and such failure continues for one business
day;
|
|
·
|
failure by the Company to comply with its obligations in respect of any consolidation, merger or sale of assets;
|
|
·
|
failure by the Company to comply with any of the other agreements in the Indenture for 60 days after receipt of written notice of
such failure from the trustee or the holders of at least 25% in principal amount of the Notes then outstanding;
|
|
·
|
default by the Company or any of its significant subsidiaries (as defined in the Indenture) with respect to any mortgage, agreement
or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed
in excess of $20,000,000 (or its foreign currency equivalent), in the aggregate of the Company and/or any of the Company’s significant
subsidiaries, whether such indebtedness now exists or shall hereafter be created, (i) resulting in such indebtedness becoming or
being declared due and payable prior to its stated maturity date or (ii) constituting a failure to pay the principal of any such
indebtedness when due and payable (after the expiration of all applicable grace periods) at its stated maturity, upon required repurchase,
upon declaration of acceleration or otherwise, and in the cases of clauses (i) and (ii), such acceleration shall not have been rescinded
or annulled or such failure to pay or default shall not have been cured or waived, or such indebtedness shall not have been paid or discharged,
as the case may be, within 30 days after written notice to the Company by the trustee or to the Company and the trustee by holders of
at least 25% in aggregate principal amount of the Notes then outstanding in accordance with the Indenture;
|
|
·
|
certain events of bankruptcy, insolvency or reorganization of the Company or any of the Company’s significant subsidiaries;
and
|
|
·
|
except as permitted by the Indenture, the subsidiary guarantee shall be held in any judicial proceeding to be unenforceable or invalid
or shall cease for any reason to be in full force and effect, or the subsidiary guarantor, or any person acting on its behalf, shall deny
or disaffirm its obligation under the subsidiary guarantee.
|
If certain bankruptcy
or insolvency-related events of default occur, the principal of, and accrued and unpaid interest, on, all of the then-outstanding
Notes shall automatically become due and payable. If an event of default with respect to the Notes, other than certain bankruptcy
and insolvency-related events of default, occurs and is continuing, the trustee, by notice to the Company, or the holders of at
least 25% in principal amount of the outstanding Notes by notice to the Company and the trustee, may, and the trustee at the request
of such holders shall, declare 100% of the principal of, and accrued and unpaid additional interest, on, all the outstanding
Notes to be due and payable. Notwithstanding the foregoing, the Indenture provides that, to the extent the Company so elects, the
sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the
Indenture will, for the first 365 days after the occurrence of such an event of default, consist exclusively of the right to receive
additional interest on the Notes at a rate equal to 0.25% per annum of the principal amount of the Notes outstanding for each day
during the first 180 days after the occurrence of such an event of default and 0.50% per annum of the principal amount of the Notes
outstanding from the 181st day to, and including, the 365th day following the occurrence of such event of default, as long as such
event of default is continuing.
The Indenture provides that
the Company shall not consolidate with or merge with or into, or sell, convey, transfer or lease all or substantially all of the consolidated
properties and assets of the Company and its subsidiaries, taken as a whole, to, another person (other than any such sale, conveyance,
transfer or lease to one or more of the Company’s direct or indirect wholly owned subsidiaries), unless: (i) the resulting,
surviving or transferee person (if not the Company) is a corporation organized and existing under the laws of the United States of America,
any State thereof or the District of Columbia, and such corporation (if not the Company) expressly assumes by supplemental indenture all
of the Company’s obligations under the Notes and the Indenture; and (ii) immediately after giving effect to such transaction,
no default or event of default has occurred and is continuing under the Indenture.
A copy of the Indenture is
attached hereto as Exhibit 4.1 (including the form of the Notes attached hereto as Exhibit 4.2) and is incorporated herein by
reference (and this description is qualified in its entirety by reference to such documents).
The Company’s net proceeds
from this offering were approximately $361.4 million after deducting the initial purchasers’ discounts and commissions and the estimated
offering expenses payable by the Company. The Company used (i) approximately $250.0 million of the net proceeds from this offering
to repay the Company’s term loan facility entered into in connection with the acquisition of Wandera, Inc. and to pay any associated
prepayment penalties and accrued and unpaid interest to the date of repayment, (ii) approximately $36.0 million of the net proceeds
from this offering to fund the cost of entering into the Capped Calls (as defined and described below), and (iii) the remainder of
the net proceeds for general corporate purposes, which may include working capital, capital expenditures, and potential acquisitions and
strategic transactions.
On September 14,
2021, concurrently with the pricing of the Notes, and on September 17, 2021, concurrently with the initial purchasers’
exercise of their option to purchase additional Notes, the Company also entered into privately negotiated capped call transactions
(the “Capped Calls”) with Barclays Bank PLC, through its agent Barclays Capital Inc., Bank of America, N.A., Bank of
Montreal, through its agent BMO Capital Markets Corp., Nomura Global Financial Products Inc., and Royal Bank of Canada, represented
by RBC Capital Markets, LLC (collectively, the “Counterparties”). The Capped Calls each have an initial strike price of
approximately $49.99 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The
Capped Calls have initial cap prices of $71.42 per share, subject to certain adjustments. The Capped Calls cover, subject to
anti-dilution adjustments, approximately 7.5 million shares of the Company’s common stock. The Capped Calls are generally
intended to reduce or offset the potential dilution to the common stock upon any conversion of the Notes with such reduction or
offset, as the case may be, subject to a cap based on the cap price. The Company paid approximately $36.0 million from the net
proceeds from the issuance and sale of the Notes to purchase the Capped Calls. The Capped Calls are subject to either adjustment or
termination upon the occurrence of specified extraordinary events affecting the Company, including a merger event; a tender offer;
and a nationalization, insolvency or delisting involving the Company. In addition, the Capped Calls are subject to certain specified
additional disruption events that may give rise to terminations of the Capped Calls, including changes in law; failures to deliver;
and hedging disruptions.
The summary of the foregoing
transactions is qualified in its entirety by reference to the text of the Capped Calls, a form of which is attached as Exhibit 10.1
to this Current Report on Form 8-K and is incorporated herein by reference.
Certain initial purchasers
under the purchase agreement and Counterparties under the confirmations entered into in connection with the Capped Calls, or their affiliates,
have engaged in, and may in the future engage in, other commercial dealings with the Company or its affiliates in the ordinary course
of business. They have received, or may in the future receive, customary fees and commissions for those transactions.