Tetra Tech Announces Pricing of $500 Million Offering of Convertible Senior Notes
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The notes will be general unsecured obligations of Tetra Tech and will accrue interest payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2024, at a rate of
Tetra Tech estimates that the net proceeds to Tetra Tech from the offering will be approximately
The notes will be convertible at the option of the holders in certain circumstances. 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 conversion rate will initially be 5.0855 shares of Tetra Tech’s common stock per
Tetra Tech may not redeem the notes prior to August 20, 2026. Tetra Tech may redeem for cash all or any portion of the notes (subject to certain limitations), at its option, on or after August 20, 2026 if the last reported sale price of Tetra Tech’s common stock has been at least
If Tetra Tech undergoes a “fundamental change” (as defined in the indenture that will govern the notes) then, subject to certain conditions and exceptions, holders may require Tetra Tech to repurchase for cash all or any portion of their notes at a fundamental change repurchase price equal to
In connection with the pricing of the notes, Tetra Tech entered into privately negotiated capped call transactions with certain of the initial purchasers or affiliates thereof and/or other financial institutions (the “option counterparties”). The capped call transactions 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.
The cap price of the capped call transactions relating to the notes will initially be approximately
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 were only offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act by means of a private offering memorandum. 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
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 timing and completion 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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Jim Wu, Investor Relations
Charlie MacPherson, Media & Public Relations
(626) 470-2844
Source: Tetra Tech, Inc.
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