J. Wood Capital Advisors acts as financial advisor for Groupon’s $197 million convertible exchange and new issuance

november 2024 | read press release

Transaction Background

Groupon, Inc. (“Groupon” or the “Company”) had $230mm of convertible debt maturing in 2026 and wanted to explore options for refinancing:

Company objectives:

Reduce financing overhang of upcoming 2026 maturity by extending the maturity of the notes by an additional year
Offer sufficient collateral and covenants for convertible investors while maximizing strategic and operational flexibility
Avoid stock price risk by pricing overnight
Manage overall dilution of the transaction by achieving a significant conversion premium

JWCA acted as financial advisor for the exchange and new issuance, providing the following support for the Company:

Designed a private exchange process that eliminated stock price risk and drove competitive terms in a new convertible
Advised and negotiated on various aspects of the secured convertible’s collateral and covenant package
Led investor outreach and execution of new issuance and exchange

Results

The Company executed a successful refinancing transaction for its 1.125% convertible notes due 2026 in private exchange process which allowed for the transaction to be priced without a day of risk in the market:

Groupon extended the maturity of outstanding notes by ~$176mm of 2026 notes for $176mm new convertible notes due 2027 exchanging
Sold an additional $21mm of new money bonds to investors

Groupon addressed ~77% of the original $230mm convertible issuance, reducing liability overhang

This is J. Wood Capital’s second advisory assignment for the Company after advising on the 2026 convertible notes issuance in 2021