Q2 Holdings, Inc. ("Q2") (NYSE: QTWO), a leading provider
of digital transformation solutions for banking and lending,
announced that it has entered into privately negotiated exchange
and/or subscription agreements, with certain holders of its
outstanding 0.75% Convertible Senior Notes due 2023 (the "2023
Notes") and certain new investors pursuant to which Q2 will
issue $350 million principal amount of 0.125% Convertible Senior
Notes due 2025 (the "New Notes") consisting of (a) $210.7
million of New Notes and either shares of Q2’s common stock or cash
in exchange for approximately $181.9 million principal amount of
the 2023 Notes (the "Exchange Transactions") and (b) $139.3
million principal amount of New Notes for cash (the
"Subscription Transactions"), in each case, pursuant to
exemptions from registration under the Securities Act of 1933, as
amended (the “Securities Act”), and the rules and
regulations thereunder. Following the closing of the Exchange
Transactions, $48.1 million in aggregate principal amount of 2023
Notes will remain outstanding with terms unchanged. The Exchange
Transactions and the Subscription Transactions are expected to
close concurrently on or about November 18, 2020, subject to
customary closing conditions.
The New Notes will represent senior unsecured obligations of Q2
and will pay interest semi-annually in arrears on each May 15 and
November 15, commencing on May 15, 2021, at a rate of 0.125% per
annum. The New Notes will mature on November 15, 2025, unless
earlier converted, redeemed or repurchased. Prior to the close of
business on the business day immediately preceding August 15, 2025,
the New Notes will be convertible at the option of holders only
upon the satisfaction of certain conditions and during certain
periods. On or after August 15, 2025, until close of business on
the second scheduled trading day preceding maturity, the New Notes
will be convertible at the option of the holders at any time
regardless of these conditions. The New Notes will be convertible
into cash, shares of Q2's common stock or a combination of cash and
Q2’s common stock, at Q2’s election. The initial conversion rate is
7.1355 shares of Q2’s common stock per $1,000 principal amount of
New Notes, which is equivalent to an initial conversion price of
approximately $140.14 per share, and will be subject to customary
anti-dilution adjustments. On or after November 20, 2023, Q2 may
redeem for cash all or any portion of the New Notes if the last
reported sale price of Q2’s common stock has been at least 130% of
the conversion price for the New Notes for at least 20 trading days
during any 30 consecutive trading day period.
If Q2 undergoes a fundamental change (as defined in the
indenture governing the New Notes), holders may require Q2 to
purchase for cash all or part of their New Notes at a purchase
price equal to 100% of the principal amount of the Convertible
Notes to be purchased, plus accrued and unpaid interest, if any, up
to, but excluding, the fundamental change repurchase date. In
addition, if certain make-whole fundamental changes occur or Q2
calls the New Notes for redemption, Q2 will, in certain
circumstances, increase the conversion rate for any New Notes
converted in connection with such make-whole fundamental change or
redemption.
Q2 will not receive any cash proceeds from the Exchange
Transactions. In exchange for issuing the New Notes pursuant to the
Exchange Transactions, Q2 will receive and cancel the exchanged
2023 Notes. Q2 estimates that net cash proceeds from the
Subscription Transactions will be approximately $132.1 million
after deducting estimated offering expenses for both the Exchange
Transactions and the Subscription Transactions. Q2 intends to use
net cash proceeds from the Subscription Transactions to pay the
cost of the capped call transactions described below and for
general corporate purposes.
In connection with the exchange and/or subscription agreements,
Q2 entered into capped call transactions with certain dealers (the
“Option Counterparties”). The capped call transactions are
expected generally to reduce the potential dilution to Q2’s common
stock upon any conversion of New Notes and/or offset any cash
payments Q2 is required to make in excess of the principal amount
of converted New Notes, as the case may be, in each case upon
conversion of the New Notes.
Q2 expects that in connection with establishing their initial
hedges of these transactions, the Option Counterparties and/or
their respective affiliates will enter into various derivative
transactions with respect to Q2’s common stock and/or purchase Q2’s
common stock in secondary market transactions concurrently with, or
shortly after, the pricing of the New Notes. This activity could
increase (or reduce the size of any decrease in) the market price
of Q2’s common stock or the New Notes at that time. In addition, Q2
expects that the Option Counterparties and/or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to Q2’s common stock
and/or purchasing or selling Q2’s common stock or other securities
of Q2 in secondary market transactions following the pricing of the
New Notes and prior to the maturity of the New Notes (and are
likely to do so during any observation period related to a
conversion of New Notes). This activity could also cause or avoid
an increase or a decrease in the market price of Q2’s common stock
or the New Notes, which could affect the ability of holders of New
Notes to convert the New Notes and, to the extent the activities
occur during any observation period related to a conversion of the
New Notes, could affect the amount of cash and/or the number and
value of shares of Q2 common stock that holders will receive upon
conversion of the New Notes.
In connection with the issuance of the 2023 Notes, Q2 entered
into convertible note hedge transactions (the “Existing
Convertible Note Hedge Transactions”) with certain financial
institutions (the “Existing Option Counterparties”). Q2 also
entered into separate warrant transactions (the “Existing
Warrant Transactions”) with the Existing Option Counterparties.
In connection with the exchange transactions with respect to the
2023 Notes, Q2 entered into agreements with the Existing Option
Counterparties to terminate a portion of: (i) the Existing
Convertible Note Hedge Transactions in a notional amount
corresponding to the principal amount of such 2023 Notes exchanged
and (ii) the Existing Warrant Transactions with respect to a number
of shares equal to the notional shares underlying such 2023 Notes
exchanged. In connection with such terminations and the related
unwinding of the existing hedge position of the existing
counterparties with respect to such transactions, such Existing
Option Counterparties and/or their respective affiliates may sell
shares of Q2’s common stock in secondary market transactions,
and/or unwind various derivative transactions with respect to the
common stock concurrently with or shortly after the pricing of the
New Notes.
In connection with such terminations, Q2 anticipates that it
will receive net proceeds from the Existing Option Counterparties
equal to approximately $34.1 million, which it intends to use for
general corporate purposes. The exchange of Q2’s 2023 Notes and the
unwind of the Existing Convertible Note Hedge Transactions and the
Existing Warrant Transactions described above, and the potential
related market activities by exchanging holders of the 2023 Notes
and the existing counterparties, as applicable, could increase (or
reduce the size of any decrease in) or decrease (or reduce the size
of any increase in) the market price of Q2’s common stock, which
may affect the trading price of the notes, at that time and Q2
cannot predict the magnitude of such market activity or the overall
effect it will have on the price of the notes or its common
stock.
The New Notes, any shares of common stock issued in the Exchange
Transactions and any shares issuable upon conversion of the New
Notes have not been registered under the Securities Act or under
any state securities laws and may not be offered or sold without
registration under, or an applicable exemption from, the
registration requirements. This announcement does not constitute an
offer to sell, nor is it a solicitation of an offer to buy, these
securities, 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 registration or qualification under the
securities laws of any state or any jurisdiction.
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, Q2 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
Exchange Transactions and the Subscription Transactions, such
uncertainties and circumstances include whether Q2 will consummate
the Exchange Transactions and the Subscription Transactions, and
the use of the net proceeds from the Subscription Transactions.
Various factors could also adversely affect Q2’s operations,
business or financial results in the future and cause Q2’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 Q2’s Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30,
2020, each 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.q2.com/.
About Q2 Holdings, Inc.
Q2 is a financial experience company dedicated to providing
digital banking and lending solutions to banks, credit unions,
alternative finance, and fintech companies in the U.S. and
internationally. With comprehensive end-to-end solution sets, Q2
enables its partners to provide cohesive, secure, data-driven
experiences to every account holder – from consumer to small
business and corporate. Headquartered in Austin, Texas, Q2 has
offices throughout the world and is publicly traded on the NYSE
under the stock symbol QTWO.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201112005622/en/
Media Contact: Beth Williams Q2 Holdings, Inc. O:
512.685.2023 beth.williams@q2.com Investor Contact: Josh
Yankovich Q2 Holdings, Inc. O: (512) 682-4463
josh.yankovich@q2.com
Q2 (NYSE:QTWO)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Q2 (NYSE:QTWO)
Historical Stock Chart
Von Jul 2023 bis Jul 2024