JWCA advises Atlassian on the repurchase of additional convertible notes for cash

june 2021

Transaction Background

In March 2021, JWCA advised Atlassian (“TEAM” or the “Company”) on a second repurchase of ~$200mm of its 2023 convertible. In June, JWCA advised on an additional ~$193mm repurchase of the convertible.

In June 2021, Atlassian wanted to continue its plan to quickly and efficiently de-lever the balance sheet.

Atlassian’s objectives included:

  • Dilution: retire the convertible to limit dilution and interest expense

  • Minimize transaction and friction costs; execute as efficiently as possible

JWCA acted as Repurchase Agent for the transaction and provided analysis and advice around:

  • Tactics around investor targeting and execution method

  • Investor outreach, negotiation, and execution of repurchases

  • Accounting and tax analysis around the extinguishment of the existing convertible notes for cash and stock

  • Assisted in unwind negotiations of their capped call

Results

The Company executed a successful liability management transaction for its 0.625% convertible notes due 2023:

  • Repurchased $193mm of their convertible notes (~35% of outstanding) for cash. In combination with the repurchase execution in December, Atlassian has now retired ~64% of the original $1,000mm convertible issuance

  • Saved an additional ~$2.3mm of cash interest over the remaining life (~$8.7mm in total)