LAKE SUCCESS, N.Y., March 2, 2012 /PRNewswire/ -- DealerTrack Holdings, Inc. ("DealerTrack") (Nasdaq: TRAK) announced that the initial purchasers of $175 million principal amount of DealerTrack's 1.50% Senior Convertible Notes due 2017 (the "Notes") have elected to exercise, in full, their option to purchase an additional $25 million principal amount of the Notes. The Notes are being sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act'). The offering, including the exercise in full of the option to purchase additional Notes, is expected to close on March 5, 2012 and is subject to customary closing conditions.
DealerTrack estimates that the net proceeds from this offering will be approximately $193.3 million, after deducting the initial purchasers' fees and estimated offering expenses to be paid by DealerTrack. As previously disclosed, DealerTrack will use a portion of the net proceeds of the offering to fund the cost of the convertible note hedge transactions that DealerTrack entered into in connection with the offering of the Notes (after such cost is partially offset by the proceeds from the sale of the warrant transactions). As the initial purchasers have exercised their option to purchase additional Notes in full, the number of shares of common stock underlying the convertible note hedges and warrant transactions will automatically increase on a pro rata basis, and DealerTrack will use a portion of the net proceeds from the sale of the additional Notes to pay the net cost of such increase. Holders of the Notes will not have any rights with respect to any of the convertible note hedges or warrant transactions entered into by DealerTrack.
DealerTrack intends to use the remaining proceeds from the offering for working capital and general corporate purposes, which may include, among other things, repayment of existing indebtedness, acquisitions and investments.