Life360 issuing $250m in debt ahead of potential M&A activity
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The news: Family safety and location sharing app developer Life360 plans to issue $250 million in debt to institutional investors to fund prospective acquisitions or investments in complementary businesses, products, services or technologies.
The numbers: The NASDAQ and ASX-listed company plans to issue $250 million in convertible senior notes that will accrue interest paid out semi-annually and will mature on 1 June, 2030.
There is an option for purchasers to purchase additional debtor up to $37.5 million over a 13 day period.
The notes will also have an early redemption date of 5 June 2028, but not within 40 scheduled trading days before the maturity date. This can only be redeemed early if Life360’s last traded stock price exceeds 130% of the conversion price.
Life360 shares last closed at $33.14.
The context: Some of the funds generated will support the cost of Life360 entering into privately negotiated capped call transactions with one or more of the initial purchasers, their affiliates, and financial institutions.
Investment bank RBC Capital Markets analyst Wei-Weng Chen said, “given cash does not appear to be a constraint on 360's business presently, we believe the market may view this announcement as an indication that M&A activity may be forthcoming”.
The sources: ASX, RBC Capital research
