Tetra Tech Announces Proposed Private Placement of $500 Million of Convertible Senior Notes
17 Agosto 2023 - 8:00AM
Business Wire
Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end
consulting and engineering services, announced today that it
intends to offer, subject to market conditions and other factors,
$500.0 million aggregate principal amount of Convertible Senior
Notes due 2028 (the “notes”) in a private placement (the
“offering”) only to persons reasonably believed to be “qualified
institutional buyers” pursuant to Rule 144A under the Securities
Act of 1933, as amended (the “Securities Act”). Tetra Tech also
intends to grant the initial purchasers of the notes an option to
purchase, during a 13-day period beginning on, and including, the
date on which the notes are first issued, up to an additional $75.0
million aggregate principal amount of the notes.
The notes will be general unsecured obligations of Tetra Tech
and will accrue interest payable semiannually in arrears. Upon
conversion, Tetra Tech will pay cash up to the aggregate principal
amount of the notes to be converted and pay or deliver, as the case
may be, cash, shares of Tetra Tech's common stock or a combination
of cash and shares of Tetra Tech's common stock, at Tetra Tech’s
election, in respect of the remainder, if any, of Tetra Tech’s
conversion obligation in excess of the aggregate principal amount
of the notes being converted. The interest rate, initial conversion
rate and other terms of the notes will be determined at the time of
pricing of the offering.
Tetra Tech expects to use the net proceeds from the offering to
pay the cost of the capped call transactions described below and to
repay all $185 million principal amount outstanding under its
revolving credit facility, up to $234 million principal amount
outstanding under its senior secured term loan due 2027 (the “2027
Term Loan”) and, with remaining proceeds, if any, a portion of the
$500 million principal amount outstanding under its senior secured
term loan due 2026 (the “2026 Term Loan”). If the initial
purchasers exercise their option to purchase additional notes,
Tetra Tech expects to use a portion of the net proceeds from the
sale of the additional notes to enter into additional capped call
transactions with the option counterparties (as defined below),
repay any remaining principal amount outstanding under the 2027
Term Loan and, with the remaining proceeds, if any, repay
additional principal amount outstanding under the 2026 Term
Loan.
In connection with the pricing of the notes, Tetra Tech expects
to enter into privately negotiated capped call transactions with
one or more of the initial purchasers or affiliates thereof and/or
other financial institutions (the “option counterparties”). The
capped call transactions will cover, subject to customary
adjustments substantially similar to those applicable to the notes,
the number of shares of Tetra Tech’s common stock initially
underlying the notes. The capped call transactions are expected
generally to reduce the potential dilution to Tetra Tech’s common
stock upon any conversion of notes and/or offset any cash payments
Tetra Tech is required to make in excess of the principal amount of
converted notes, as the case may be, with such reduction and/or
offset subject to a cap.
In connection with establishing their initial hedges of the
capped call transactions, Tetra Tech expects the option
counterparties or their respective affiliates will enter into
various derivative transactions with respect to Tetra Tech’s common
stock and/or purchase shares of Tetra Tech’s common stock
concurrently with or shortly after the pricing of the notes. This
activity could increase (or reduce the size of any decrease in) the
market price of Tetra Tech’s common stock or the notes at that
time.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to Tetra Tech’s common
stock and/or purchasing or selling Tetra Tech’s common stock or
other securities of Tetra Tech in secondary market transactions
following the pricing of the notes and prior to the maturity of the
notes (and are likely to do so during any observation period
related to conversion of notes, or, to the extent Tetra Tech
exercises the relevant election under the capped call transactions,
following any repurchase or redemption of the notes). This activity
could also cause or avoid an increase or a decrease in the market
price of Tetra Tech’s common stock or the notes which could affect
the ability of a holder of notes to convert the notes and, to the
extent the activity occurs during any observation period related to
a conversion of notes, this could affect the number of shares and
value of the consideration, if any, that a holder of notes will
receive upon conversion of its notes.
The notes and any shares of Tetra Tech’s common stock issuable
upon conversion of the notes have not been and will not be
registered under the Securities Act, any state securities laws or
the securities laws of any other jurisdiction, and unless so
registered, may not be offered or sold in the United States absent
registration or an applicable exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act
and other applicable securities laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any of these securities nor shall
there be any sale of these securities in any state or jurisdiction
in which such an offer, solicitation or sale would be unlawful
prior to the registration or qualification thereof under the
securities laws of any such state or jurisdiction.
About Tetra Tech
Tetra Tech is a leading provider of high-end consulting and
engineering services for projects worldwide. With 27,000 employees
working together, Tetra Tech provides clear solutions to complex
problems in water, environment, sustainable infrastructure,
renewable energy, and international development. Tetra Tech is
Leading with Science® to provide sustainable and resilient
solutions for its clients.
Forward-Looking Statements
Any statements made in this release that are not based on
historical fact are forward-looking statements, including
statements concerning the proposed terms of the notes and capped
call transactions, the completion, timing and size of the proposed
offering of the notes and capped call transactions, the anticipated
use of proceeds from the offering and the grant of the option to
the initial purchasers. Any forward-looking statements made in this
release represent management’s best judgment as to what may occur
in the future. However, Tetra Tech’s actual outcome and results are
not guaranteed and are subject to certain risks, uncertainties and
assumptions ("Future Factors"), and may differ materially from what
is expressed. For a description of Future Factors that could cause
actual results to differ materially from such forward-looking
statements, see the discussion under the section "Risk Factors"
included in Tetra Tech’s Form 10-K and Form 10-Q filings with the
Securities and Exchange Commission (the “SEC”) and other filings
that Tetra Tech makes from time to time with the SEC, which are
available on the SEC’s website at www.sec.gov. All forward-looking statements
contained in this press release speak only as of the date on which
they were made. Tetra Tech undertakes no obligation to update such
statements to reflect events that occur or circumstances that exist
after the date on which they were made.
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version on businesswire.com: https://www.businesswire.com/news/home/20230816481667/en/
Jim Wu, Investor Relations Charlie MacPherson, Media &
Public Relations (626) 470-2844
Tetra Tech (NASDAQ:TTEK)
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