Constellation Software Inc. Announces Rights Offering of Series 1 Debentures
04 Août 2023 - 1:32AM
Constellation Software Inc. (TSX: CSU) (the
“
Company”) has announced a rights offering (the
“
Rights Offering”) pursuant to which the Company
intends to distribute rights (the “
Rights”) that
will entitle holders of common shares (“
Common
Shares”) of the Company (the
“
Shareholders”) on the applicable record date to
purchase up to C$700 million aggregate principal amount of
unsecured subordinated floating rate debentures, Series 1 of the
Company (the “
Series 1
Debentures”).
The Series 1 Debentures are expected to be
issued as an additional tranche of, and treated as a single series
with, the outstanding C$284.2 million aggregate principal amount of
Series 1 Debentures.
The net proceeds of the Rights Offering are
expected to be used by the Company to pay down indebtedness under
its existing credit facility (the “Credit
Facility”), with any remaining proceeds to be used for
future acquisitions.
The Rights are expected to be issued in
satisfaction of a dividend to be declared by the Company on the
Common Shares in the amount of one Right per Common Share. For
every 3.03 Rights held, the holder of such Rights will be entitled
to subscribe for C$100 principal amount of Series 1 Debentures. The
Rights and the Series 1 Debentures issuable on the exercise of the
Rights will be qualified for distribution in each province and
territory of Canada by way of a short form prospectus.
The exercise period and exercise price will be
established prior to the filing of the Company’s final short form
prospectus. Based on the current trading price of the Series 1
Debentures on the Toronto Stock Exchange, the Company anticipates
that the Series 1 Debentures will be issued at a premium to their
principal amount.
The Series 1 Debentures have a maturity date of
March 31, 2040 (the “Maturity Date”). The Series 1
Debentures will be issuable only in denominations of C$100 and
integral multiples thereof and, from and including the date of
issue to but excluding March 31, 2024, will bear interest at a rate
of 13.3% per annum (the “Current Rate”). From and
including March 31, 2024 to but excluding the Maturity Date, the
interest rate applicable to the Series 1 Debentures will be reset
on an annual basis on March 31 of each year, at a rate equal to the
annual average percentage change in the All-items Consumer Price
Index during the 12 month period ending on December 31 in the prior
year (which amount may be positive or negative) plus 6.5% (the
“Floating Interest Rate”). Notwithstanding the
foregoing, the interest rate applicable to the Series 1 Debentures
will not be less than 0%. Interest, if any, will be payable
quarterly in arrears in equal instalments on March 31, June 30,
September 30 and December 31 in each year. The Current Rate will
only apply to the Series 1 Debentures in respect of the interest
payments up to and including March 31, 2024. Effective March 31,
2024, the interest rate payable on the Series 1 Debentures will be
based on the applicable Floating Interest Rate.
All payments in respect of the Series 1
Debentures will be subordinated in right of payment to the prior
payment in full of all senior indebtedness of the Company, which
includes the Credit Facility.
Further details regarding the Rights Offering
and the Series 1 Debentures can be found in the preliminary short
form prospectus of the Company which has been filed on SEDAR+ at
www.sedarplus.ca and is available on the Company’s website at
https://www.csisoftware.com/category/stat-filings.
This press release does not constitute an offer
to sell, or the solicitation of an offer to buy, any securities of
the Company.
Forward Looking Statements
The statements contained in this press release
which are not historical facts are forward-looking statements,
which involve risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the
Company to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Words such as “may”, “will”, “expect”,
“believe”, “plan”, “intend”, “should”, “anticipate” and other
similar terminology are intended to identify forward-looking
statements. These statements reflect current assumptions and
expectations regarding future events and speak only as of the date
of this press release. Forward-looking statements involve
significant risks and uncertainties, should not be read as
guarantees of future performance or results, and will not
necessarily be accurate indications of whether or not such results
will be achieved. A number of factors could cause actual results to
vary significantly from the results discussed in the
forward-looking statements.
About Constellation Software Inc.
The Common Shares are listed on the TSX under
the symbol “CSU”. The Series 1 Debentures are listed on the TSX
under the symbol “CSU.DB”. The Company acquires, manages and builds
vertical market software businesses.
For further information please contact:
Jamal BakshChief Financial
Officer416-861-9677info@csisoftware.comwww.csisoftware.com
Constellation Software (TSX:CSU)
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