BOSTON--(BUSINESS WIRE)--
Wayfair Inc. (NYSE:W) (the “Company,” “we” or “Wayfair”) announced today
that it intends to offer, subject to market conditions and other
factors, $500 million aggregate principal amount of convertible senior
notes due 2024 (the “notes”) in a private offering (the “offering”) to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). In connection
with the offering, the Company expects to grant the initial purchasers
an option to purchase (solely to cover over-allotments, if any) up to an
additional $75 million aggregate principal amount of notes, which
additional notes shall be delivered within a 13-day period beginning on,
and including, the date the Company first issues the notes.
The final terms of the notes, including the initial conversion rate,
interest rate and certain other terms, will be determined at the time of
pricing. The notes will bear interest semi-annually and will mature on
November 1, 2024, unless earlier redeemed, repurchased or converted in
accordance with their terms. Prior to August 1, 2024, the notes will be
convertible only upon satisfaction of certain conditions and during
certain periods. Thereafter, the notes will be convertible at any time
until the close of business on the second scheduled trading day
immediately preceding the maturity date. The Company may not redeem the
notes prior to May 8, 2022. On or after May 8, 2022, the Company may
redeem for cash all or part of the notes if the last reported sale price
of the Company’s Class A common stock has been at least 130% of the
conversion price then in effect for at least 20 trading days (whether or
not consecutive), including at least one of the five trading days
immediately preceding the date on which the Company provides notice of
redemption, during any 30 consecutive trading day period ending on, and
including, the trading day immediately preceding the date on which the
Company provides notice of redemption. The redemption price will equal
100% of the principal amount of the notes being redeemed, plus accrued
and unpaid interest to, but excluding, the redemption date.
The notes will be convertible at the option of holders, subject to
certain conditions and during certain periods, into cash, shares of the
Company’s Class A common stock or a combination of cash and shares of
the Company’s Class A common stock, with the form of consideration
determined at the Company’s election. Holders of the notes will have the
right to require the Company to repurchase all or a portion of their
notes at 100% of their principal amount, plus any accrued and unpaid
interest, upon the occurrence of certain events.
When issued, the notes will be the Company’s senior unsecured
obligations and will rank senior in right of payment to any of the
Company’s unsecured indebtedness that is expressly subordinated in right
of payment to the notes; equal in right of payment to any of the
Company’s unsecured indebtedness that is not so subordinated;
effectively junior in right of payment to any of the Company’s secured
indebtedness to the extent of the value of the assets securing such
indebtedness; and structurally junior to all indebtedness and other
liabilities (including trade payables) of the Company’s subsidiaries.
In connection with the pricing of the notes, the Company expects to
enter into privately negotiated capped call transactions with one or
more of the initial purchasers and/or their respective affiliates and/or
other financial institutions (in this capacity, the “option
counterparties”). These capped call transactions are expected generally
to reduce the potential dilution with respect to the Company’s Class A
common stock upon any conversion of notes and/or offset any cash
payments the Company is required to make in excess of the principal
amount of converted notes, as the case may be, in the event that the
market price of the Company’s Class A common stock is greater than the
strike price of the capped call transactions, with such reduction of
potential dilution and/or offset of cash payments subject to a cap.
The Company has been advised that, in connection with establishing their
initial hedge positions with respect to the capped call transactions,
the option counterparties or their respective affiliates expect to
purchase shares of the Company’s Class A common stock and/or enter into
various derivative transactions with respect to the Company’s Class A
common stock concurrently with, or shortly after, the pricing of the
notes. This activity could have the effect of increasing (or reducing
the size of any decrease in) the market price of the Company’s Class A
common stock or the notes at that time. The option counterparties or
their respective affiliates may modify their hedge positions by entering
into or unwinding various derivatives with respect to the Company’s
Class A common stock and/or purchasing or selling the Company’s Class A
common stock or other securities of the Company in secondary market
transactions following the pricing of the notes and prior to maturity of
the notes. The option counterparties may engage in such activity during
any observation period relating to a conversion of notes prior to August
1, 2024, and the option counterparties are likely to engage in market
activity during any observation period relating to a conversion of notes
on or after August 1, 2024. This activity could also cause or avoid an
increase or a decrease in the market price of the Company’s Class A
common stock or the notes, which could affect the ability of holders to
convert the notes and, to the extent the activity occurs during any
observation period related to a conversion of the notes, it could affect
the number of shares of the Company’s Class A common stock and value of
the consideration that holders will receive upon conversion of the notes.
In addition, if any such capped call transaction fails to become
effective, whether or not this offering of notes is completed, the
option counterparty party thereto may unwind its hedge positions with
respect to the Company’s Class A common stock, which could adversely
affect the value of the Company’s Class A common stock and, if the notes
have been issued, the value of the notes.
The Company intends to use a portion of the net proceeds from this
offering to pay the cost of the capped call transactions. The Company
intends to use the remainder of the net proceeds from this offering for
working capital and general corporate purposes. If the initial
purchasers exercise their over-allotment option, the Company 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 and the remainder of the net proceeds for working capital
and general corporate purposes.
The notes and the Class A common stock issuable upon conversion of the
notes, if any, are not being registered under the Securities Act, or the
securities laws of any other jurisdiction. The notes and the Class A
common stock issuable upon conversion of the notes, if any, may not be
offered or sold in the United States except in transactions exempt from,
or not subject to, the registration requirements of the Securities Act
and any applicable state securities laws.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the securities described herein, nor
shall there be any sale of these securities in any state or jurisdiction
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of such
jurisdiction.
About Wayfair
Wayfair believes everyone should live in a home they love. Through
technology and innovation, Wayfair makes it possible for shoppers to
quickly and easily find exactly what they want from a selection of more
than 10 million items across home furnishings, décor, home improvement,
housewares and more. Committed to delighting its customers every step of
the way, Wayfair is reinventing the way people shop for their homes -
from product discovery to final delivery.
The Wayfair family of sites includes:
-
Wayfair - Everything home for every budget
-
Joss & Main - Affordable discoveries for gorgeous living
-
AllModern - Unbelievable prices on everything modern
-
Birch Lane - Home of classic designs and fresh finds
-
Perigold - The widest-ever selection of premium home
Wayfair generated $6.2 billion in net revenue for the twelve months
ended September 30, 2018. Headquartered in Boston, Massachusetts with
operations throughout North America and Europe, the Company employs more
than 10,900 people.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of federal and state securities laws. All statements other than
statements of historical fact contained in this press release,
including, but not limited to, statements regarding: whether the Company
will offer and issue the notes and the terms of the notes; the
anticipated use of the net proceeds of the offering; expectations
regarding the effect of the capped call transactions and regarding
actions of the option counterparties and their respective affiliates;
and whether the capped call transactions will become effective, are
forward-looking statements. In some cases, you can identify
forward-looking statements by terms such as “may,” “will,” “should,”
“expects,” “plans,” “anticipates,” “could,” “intends,” “target,”
“projects,” “contemplates,” “believes,” “estimates,” “predicts,”
“potential” or “continue” or the negative of these terms or other
similar expressions.
Forward-looking statements are based on current expectations of future
events. We cannot guarantee that any forward-looking statement will be
accurate, although we believe that we have been reasonable in our
expectations and assumptions. Investors should realize that if
underlying assumptions prove inaccurate or that known or unknown risks
or uncertainties materialize, actual results could vary materially from
our expectations and projections. Investors are therefore cautioned not
to place undue reliance on any forward-looking statements. These
forward-looking statements speak only as of the date of this press
release and, except as required by applicable law, we undertake no
obligation to publicly update or revise any forward-looking statements
contained herein, whether as a result of any new information, future
events or otherwise.
A list and description of risks, uncertainties and other factors that
could cause or contribute to differences in the Company’s results can be
found under Part I, Item 1A, Risk Factors in its Annual Report on Form
10-K for the fiscal year ended December 31, 2017 and the Company’s
subsequent filings with the Securities and Exchange Commission. The
Company qualifies all of its forward-looking statements by these
cautionary statements.
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Investor Relations:
Wayfair Inc.
Joe Wilson
IR@wayfair.com
Source: Wayfair Inc.