Business
Freshpet, Inc. Closes $402.5 Million Convertible Senior Notes Offering
Proceeds from the offering strengthen balance sheet to support the Company’s Fresh Future growth plan Convertible security provides significantly reduced
About this update from Freshpet, Inc.
[{"type":"text","content":"Proceeds from the offering strengthen balance sheet to support the Company’s Fresh Future growth plan Convertible security provides significantly reduced interest costs, as compared to alternative debt structures, and greater flexibility with no covenants, no amortization and a five-year maturity Company purchased a capped call hedge to increased its effective conversion premium to 120% so there is no dilution to existing shareholders until the stock exceeds $120.23 per share Company retains the flexibility to ultimately settle any conversions in cash, shares, or a combination SECAUCUS, N.J., March 20, 2023 (GLOBE NEWSWIRE) -- Freshpet, Inc. (NASDAQ: FRPT) (“Freshpet” or the “Company”) today announced the closing of its offering of $350.0 million aggregate principal amount of 3.00% convertible senior notes due 2028 (the “Notes”). In response to strong long-only investor demand and robust after-market performance, the initial purchasers fully exercised their option to purchase an additional $52.5 million aggregate principal amount of the Notes, included in today’s closing, raising a total of $391.4 million in net proceeds for Freshpet to invest in its Fresh Future growth plans. Todd Cunfer, Chief Financial Officer of Freshpet, commented, “We are pleased to close on this important financing for the Company. We appreciate the strong support from both existing holders and new investors which we believe was reflected in the performance of our stock during and post the day of marketing. The proceeds provide the financial flexibility we need in the most cost-effective manner and fulfill our commitment to strengthen our capital structure to support the long-term growth in demand for Freshpet products. Importantly, this transaction was structured to minimize the potential future dilution for our equity shareholders with an effective 120% conversion premium and results in an effective interest rate that is materially below what could have been achieved with traditional debt securities.” A portion of the proceeds from the transaction were used to pay costs associated with the related capped call transactions and fees and expenses related to the offering of the Notes and the capped call transactions. The Company intends to use the remainder of the net proceeds for general corporate purposes. As a result of the related capped call transactio...