JWCA advises SMART on its UPSIZED $250 million convertible bond ISSUANCE

FEBRUARY 2020 | read press release

Transaction Background

SMART Global Holdings took advantage of strong convert market conditions to raise $220mm in capital to repay $203mm in high cost senior secured term loan debt.  SMART’s objectives included:

• Repay in full a high interest term loan, driving significant interest expense saving and EPS accretion

• Eliminate stock price risk on financing

JWCA advised SMART on all aspects of the financing including transaction structuring (security size, terms, capped call, accounting and tax), shareholder messaging (key selling points, what to expect on investor calls, interest savings, accretion) and execution/approach to market

JWCA led the preparation process for several weeks prior to launch enabling the Company to select the bank syndicate only days before execution

The offering was conducted via a two day over-the-wall process before launching into an overnight marketed execution

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

SMART convertible issuance was well-received by investors:

• Base deal size was upsized from $200mm to $220mm

Overnight execution eliminated stock price risk for the Company, and the wall-cross process ensured a full book of demand to anchor the transaction prior to its public launch

Strong interest from long only investors given the highly accretive use of proceeds

JWCA was in SMART’s offices with the management team on the entire day of the offering providing execution advice and ensuring a high-quality execution

Capped call documentation and auction process produced meaningful savings for SMART, while providing future flexibility and protecting the Company in certain unwind scenarios