JWCA advises Vertex on its debut upsized $345 million convertible and capped call  

April 2024 | read press release

Transaction Background

Vertex, Inc. (“Vertex” or the “Company”) successfully raised $345mm (inclusive of greenshoe) in the convertible market at attractive terms (0.75% coupon and 30.0% conversion premium). 

Vertex’s objectives included:

• Monetize strong stock price performance of ~+40% over the last 12 months

• Opportunistically raise capital at low cost with limited covenants

• Protect against future equity dilution through a derivative overlay

• Diversify investor base and access to capital 

The Company engaged J. Wood Capital Advisors to assist in the structuring, negotiation, documentation and execution of the transaction

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

• Convertible and derivative overlay structuring

• Syndicate structure and precedent data

• Accounting and tax analysis / implications

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

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

JWCA provided advice, support and analysis throughout the execution process

Results

Vertex’s offering was well received by investors, attracting significant demand from long-only investors, leading to the book being multiple times oversubscribed:

• 0.75% coupon and 30.0% conversion premium priced at the company friendly end of the coupon marketed range

  • Represents only the 4th marketed convertible in 2024 which was upsized and had a coupon less than 1.00%

• Vertex’s stock price traded down only ~7% compared to a typical stock price reaction of ~10 to 15%

• JWCA supported the management team on the entirety of the offering providing execution advice and ensuring a high-quality execution

Capped call documentation and auction process produced meaningful savings for Vertex, while maximizing flexibility for the Company