JWCA advises Bain Capital on its $750 million private convertible investment in Nutanix, Inc.
August 2020 | read press release
Transaction Background
Nutanix Inc. successfully raised $750mm in the private convertible market from Bain Capital Private Equity with use of proceeds to support the Company’s growth initiatives
Nutanix also announced a $125mm shares repurchase with the investment that is intended to offset the dilutive effect of any shares the Company may issue to settle the potential conversion of the notes
The structure contains a one-time conversion price adjustment feature whereby at the 12-month anniversary of the original issuance of the notes, the conversion price may be adjusted to $25.25 (from the initial $27.75 per share conversion price) depending on the achievement of financial milestones
Bain Capital will gain two board seats following the closing of the transaction expected in September 2020 Bain Capital engaged J. Wood Capital Advisors to assist in the structuring, negotiation, documentation and execution of its transaction
JWCA provided analysis for Bain Capital on deal structuring and related items, including:
Convertible structuring: redemption options and implications on overall economics
Convertible valuation analysis
Provisional call and make-whole mechanics
Precedent private convertible investment terms and conditions
Comparison with public 144a convertible alternative
Results
Nutanix’s private convertible issuance with Bain capital was well-received by the market
Nutanix’s stock was up 29.2% on the day following announcement
The 6-year convertible priced with attractive terms 2.50% PIK coupon and 30.6% conversion premium to the trailing 5-day VWAP in Nutanix Class A common stock (NTNX)
The convertible is provisionally callable by Nutanix after 5 years if Nutanix Class A common stock trades at or above 150% of the conversion price of the convertible notes for 20 of 30 consecutive trading days