JWCA advises Synaptics on its $450 million convertible notes offering and capped call transaction and $350 million proposed amended and restated revolving credit facility

November 2024 | read press release

Transaction Background

Synaptics, Inc. (“Synaptics” or the “Company”) successfully raised $450mm (inclusive of greenshoe) in the convertible market at very attractive terms (0.75% coupon and 32.5% conversion premium) and expects to enter into a $350mm company-friendly amended and extended revolving credit facility

Synaptics’ objectives included:

  • Refinance outstanding Term Loan debt to meaningfully lower cash interest expense

  • Protect against future equity dilution through a derivative overlay and share repurchase concurrent with the convertible offering

  • Minimize stock price risk during convertible execution

  • Increase revolver size and obtain greater flexibility in amended and extended revolver

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

  • Convertible and derivative overlay structuring

  • Delta analysis and share repurchase considerations

  • Convertible, capped call, and revolver documentation to ensure maximum value and future efficiency/flexibility for the company

  • Credit agreement negotiation to achieve favorable terms

  • Accounting analysis/implications

  • Syndicate structure and precedent data

  • Execution timing

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

JWCA negotiated with bank lenders to optimize terms and flexibility in proposed new revolver

JWCA provided advice, support and analysis throughout the execution process

Results

Synaptics' convertible transaction was very well received by investors:

  • The convertible transaction was multiple times oversubscribed, reflecting strong investor interest and demand in the Company’s convertible bond offering

  • The 0.75% coupon was below the low end of the marketed coupon range (1.00 – 1.50%)

  • The 32.5% conversion premium represented the high end of the marketed conversion premium range (27.5 – 32.5%)

Synaptics’ stock traded up 1% on the day of the convertible offering

Facilitated an amend & extend of the revolver, which is expected to increase borrowing capacity by $100mm (40%), extend expected maturity to the earlier of 5 years and 91 days prior to the maturity of 4% senior notes due 2029, and contains other Company-friendly improvements in terms

Capped call documentation and auction process produced meaningful savings for Synaptics, driving economics in the Company's favor