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Bottomline Technologies Announces Intention To Offer Up To $150 Million Of Convertible Senior Notes

Bottomline Technologies (NASDAQ: EPAY), a leading provider of cloud-based payment, invoice and banking solutions, today announced that it intends to offer up to $150 million aggregate principal amount of its convertible senior notes in an underwritten public offering.

The notes will pay interest semiannually and will be convertible, under certain circumstances, into cash or a combination of cash and shares of the company’s common stock. The notes will mature on December 1, 2017, unless repurchased or converted in accordance with their terms prior to that date. The company will not have the right to redeem the notes prior to maturity. The interest rate and terms of the notes, including their conversion rate, will be determined by negotiations among the company and the underwriters. In addition, the company expects to grant the underwriters an option to purchase up to an additional $22.5 million aggregate principal amount of notes.

If the company’s stock price increases from its current price to an amount greater than 130% of the conversion price of the notes and under certain other circumstances or time periods, the notes would be convertible into cash or a combination of cash and shares of Bottomline common stock. To help minimize dilution to existing stockholders, and/or offset potential cash payments in excess of the principal amount of the notes upon their conversion, the company also plans to enter into separate privately negotiated hedge and warrant transactions, which in combination are intended to significantly increase the effective conversion price at which it would issue new shares or pay cash in excess of the principal amount of the notes upon their conversion.

Bottomline intends to use a portion of the net proceeds of the offering for general corporate purposes, which may include the acquisition of companies, businesses or assets or working capital. In addition, the company intends to use a portion of the net proceeds of the offering to fund the cost to it of the hedge transactions described above.

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