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JWCA advises insulet on its UPSIZED $800 million convertible bond offering AND SIMULTANEOUS REPURCHASE

SEPtember 2019 | read press release

Transaction Background

Following a nearly 50% run in its share price, Insulet was interested in raising capital to retire its existing convertibles due 2021 to reduce its dilutive impact 

Insulet’s objectives

  • Maximize the repurchase amount of 2021 notes at a reasonable cost

  • Achieve a balance of leverage and dilution in pro-forma capital structure to reflect the strengthened balance sheet and profitability of the Company

  • Minimize risk from stock price exposure of refinancing

JWCA developed a capital structure roadmap for Insulet, enabling the Company to refinance its convertible debt while meeting its short- and long- term objectives

JWCA also provided extensive analysis for Insulet on deal structuring and related items, including:

  • Mix of consideration (equity vs new convertible vs cash)

  • Syndicate and fee structures

  • Tactical considerations (repurchase vs redemption)

JWCA also designed and ran a capped call auction process to achieve competitive terms

JWCA provided advice, support and analysis throughout the negotiation and execution process

Results

The Company executed a successful liability management exercise:

  • Increased base deal size to $700mm from $660mm

  • Priced at Company-friendly end of coupon range

  • Priced at Company-friendly end of conversion premium range

  • Repurchased $225mm (65.2%) of outstanding 2021 convertibles at Company-friendly terms

  • Capped call documentation and auction process produced meaningful savings for Insulet, while protecting the company in early unwind scenarios

Insulet’s stock price increased ~9% on day of execution, resulting in higher effective conversion price and cap strike