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

march 2021

Transaction Background

In December 2020, JWCA advised Atlassian (“TEAM” or the “Company”) on an initial repurchase of ~$250mm of its 2023 convertible. In March, JWCA advised on an additional ~$200mm repurchase of the convertible.

In March 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 $200mm of their convertible notes (~27% of outstanding) for cash. In combination with the repurchase execution in December, Atlassian has now retired 45% of the original $1,000mm convertible issuance

  • Saved an additional ~$2.7mm of cash interest over the remaining life (~$6.4mm in total)