JWCA advises Box on its $460 million convertible and capped call transaction, convertible repurchase and capped call unwind
September 2024 | read press release
Transaction Background
Box, Inc. (“Box” or the “Company”) successfully raised $460mm (inclusive of greenshoe) in the convertible market at attractive terms (1.50% coupon and 30.0% conversion premium)
Box’s objectives included:
Opportunistically repurchase 2026 convertible notes to manage outstanding liabilities and capital structure
Protect against future equity dilution through a derivative overlay
Minimize stock price risk during execution after achieving a 52-week high
JWCA provided extensive analysis on deal structuring and related items, including:
Refinancing tactics and analysis
Convertible and derivative overlay structuring
Convertible and capped call documentation to ensure maximum value and future efficiency/flexibility for the company
Managing capped call unwind negotiations
Accounting analysis/implications
Syndicate structure and precedent data
Execution timing
Shareholder messaging
JWCA designed and ran a capped call auction process to achieve competitive terms
JWCA provided advice, support and analysis throughout the execution process
Results
Box’s convertible transaction was very well received by investors:
The transaction was multiple times oversubscribed, reflecting strong investor interest and demand in the Company’s convertible bond offering
The 1.50% coupon was on the low end of the marketed coupon range and the 30.0% conversion premium represented the midpoint of the marketed premium range
Box’s stock traded flat on the day of the offering
Capped call documentation and auction process produced meaningful savings for Box, driving economics in the Company's favor
The Company obtained favorable terms on a trading day where over $1.0bn in convertible supply was available in the primary market
This is J. Wood’s second advisory assignment for the Company after advising Box on its convertible issuance in January 2021