PANTHERA ADVISERS GUIDES PLURALSIGHT TO SINGLE LARGEST FINANCING IN UTAH HISTORY INCLUDING $633.5 MILLION DEBUT CONVERTIBLE BOND & CAPPED CALL WITH CONCURRENT $456 MILLION SECONDARY EQUITY SALE

MARCH 2019 | READ PRESS RELEASE

Transaction Background

Pluralsight was interested in accessing the convertible debt market to raise opportunistic capital for general corporate purposes while also concurrently issuing secondary shares to provide liquidity for venture investors. It selected Panthera Advisers as its financial advisor on the transaction to provide market knowledge, comprehensive execution support, and unbiased advice.

Panthera Services

Panthera provided advice, support and analysis from the early stages of the syndicate assimilation process through deal execution and after closing ranging from core structuring and pricing recommendations to  assistance with documentation, accounting, and tax review:

  • Syndicate economics and fees – studied various economic precedents for all possible syndicate members to optimize Company’s syndicate mix. Balanced need to maintain significant bookrunner economics against desire to add research coverage and seeding customer pipeline
  • Structuring advice on call spread options (bond hedge plus warrants or capped call) when considering various tax, accounting, and economic matters, ultimately resulting in the capped call selection
  • Cost of capital optimization – analysis of economic impact of convert and capped call in various stock price scenarios to determine optimal combination of coupon, premium, and call spread selection.

  • Equity value impact relative to debt sizing – analysis of varying levels of debt and the associated impact to the stock price response based on peer proxies, which resulted in the final issuance amount following upsizing

  • Investor relations messaging

  • Debt bifurcation analysis to determine straight debt fair value for accounting

 

Returns

An upsized offering with pricing that was at company-friendly terms ( tight end of coupon, mids premium, aka “mitches”):

  • Strong investor demand led to a $183mm upsize from the launch size of $450mm

  • Convert priced at the company-friendly end of the marketed coupon range and midpoint of the conversion premium range

  • Capped call negotiation process produced directly measurable & highly meaningful savings