EZCORP Inc. priced a private offering of $150 million of convertible senior notes due May 1, 2025.
The company anticipates net proceeds of approximately $145.2 million, or about $167.0 million if the initial purchaser exercises its option in full. The initial purchaser was given an option to buy an additional $22.5 million of notes.
The notes will pay interest semiannually at an annual rate of 2.375% and will be convertible into cash, class A common shares or both.
The notes have an initial conversion rate of 62.8931 class A common shares per $1,000 of notes, which is equal to approximately $15.90 per share. The company said this represents an initial conversion premium of about 20% above the closing price of $13.25 per share on May 9.
Prior to Nov. 1, 2024, holders can convert the notes after certain events and during certain periods, and then at any time prior to the close of the business day immediately preceding the maturity date. The company may redeem for cash all or any portion of the notes on or after May 1, 2022, under specific circumstances.
The company intends to use the net proceeds for general corporate purposes and potentially to fund acquisitions. EZCORP is in various stages of discussion regarding a number of acquisition opportunities in the U.S., Canada and Latin America, and has entered into nonbinding letters of intent to acquire pawnshops in Latin America. It gave no guarantees on potential acquisitions.