Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp)
September 16 2020 - 08:38AM
Edgar (US Regulatory)
Filed Pursuant to Rule 433
Registration Nos. 333-240142
September 15, 2020
PRICING TERM SHEET
Dated September 15, 2020
A final base shelf
prospectus containing important information relating to the
securities described in this document has been filed with the
securities regulatory authorities in each of the provinces and
territories of Canada, except Québec, as well as with the U.S.
Securities and Exchange Commission on a registration statement on
Form F-10. A copy of the final base shelf prospectus, any amendment
to the final base shelf prospectus and any applicable shelf
prospectus supplement that has been filed, is required to be
delivered with this document.
This document does
not provide full disclosure of all material facts relating to the
securities offered. Investors should read the final base shelf
prospectus, any amendment and any applicable shelf prospectus
supplement for disclosure of those facts, especially risk factors
relating to the securities offered, before making an investment
decision.
Shopify
Inc.
$800,000,000
0.125% Convertible Senior Notes due
2025
Issuer:
|
Shopify Inc. (the “Issuer”)
|
|
|
Title of
securities:
|
0.125% Convertible Senior
Notes due 2025 (the “Notes”)
|
|
|
Ticker / Exchanges
for Class A Shares:
|
SHOP / The New York Stock Exchange (“NYSE”) and Toronto Stock Exchange
(“TSX”)
|
|
|
Aggregate principal
amount offered:
|
$800,000,000 aggregate principal amount of Notes
|
|
|
Over-allotment
option:
|
Up to an additional $120,000,000 aggregate principal amount of
Notes solely to cover over-allotments
|
|
|
Offering
price:
|
The Notes will be issued at a
price of 100% of their principal amount, plus accrued interest, if any, from September
18, 2020, if settlement occurs
after that date
|
|
|
Maturity:
|
November 1, 2025, unless
earlier converted, redeemed or purchased
|
|
|
Interest
rate:
|
0.125% per annum, accruing from the
settlement date
|
|
|
Interest payment
dates:
|
Each May 1 and November 1, starting on
May 1, 2021
|
|
|
Record
Dates:
|
April 15 and October 15 of each
year
|
|
|
NYSE last reported
sale price on September 15, 2020:
|
$929.39 per Class A
subordinate voting shares (“Class
A Shares”)
|
|
|
TSX last reported
sale price on September 15, 2020:
|
C$1,226.90 per Class A Share
|
|
|
Public offering
price of the Concurrent Equity
Offering:
|
$900.00 per Class A Share
|
|
|
Initial conversion
rate:
|
0.6944 of the Issuer’s Class A
Shares for each $1,000
principal amount of Notes
|
|
|
Initial conversion
price:
|
Approximately
$1,440.09 per Class A
Share
|
|
|
Conversion
premium:
|
Approximately 60.0% above the
public offering price of the Concurrent Equity
Offering
|
|
|
Trade date:
|
September 16, 2020
|
|
|
Expected settlement
date:
|
September 18, 2020
|
|
|
Book-running
managers:
|
Goldman Sachs & Co. LLC
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
|
|
|
Co-manager:
|
RBC Dominion Securities Inc.
|
|
|
CUSIP Number /
ISIN:
|
82509L AA5 / US82509LAA52
|
|
|
Use of
proceeds:
|
We estimate that the net proceeds from the offering will be
approximately $789.5 million (or approximately $908.0 million if
the underwriters exercise their over-allotment option in full),
after deducting the underwriters’ discount and estimated offering
expenses payable by us.
We currently expect to use the net proceeds from the offering and
the Concurrent Equity Offering to further strengthen our balance
sheet, providing us flexibility to fund our growth strategies that
may include: product innovation, future acquisitions and strategic
partnerships. Pending their use, we intend to invest the net
proceeds from the offering and the Concurrent Equity Offering in
short-term, investment grade, interest bearing instruments or hold
them as cash.
|
|
|
Redemption:
|
We may not redeem the
Notes prior to September 15, 2023, except if less than $80 million
aggregate principal amount of Notes remains outstanding as
described under “Description of Notes—Cleanup Redemption” in the
preliminary prospectus supplement or in the event of certain
changes in Canadian tax law as described under “Description of
Notes—Redemption for Changes in Canadian Tax Law” in the
preliminary prospectus supplement. We may redeem for cash all or
any portion of the Notes, at our option, on or after September 15,
2023 if the last reported sale price on the NYSE of the Class A
Shares has been at least 130% of the conversion price then in
effect for at least 20 trading days (whether or not consecutive)
during any 30 consecutive trading day period (including the last
trading day of such period) ending on, and including, the trading
day immediately preceding the date on which we provide notice of
redemption at a redemption price equal to 100% of the principal
amount of the notes to be redeemed, plus accrued and unpaid
interest to, but excluding, the redemption date.
|
Adjustment to
conversion rate upon conversion in connection with a make-whole
fundamental change or during a redemption period:
|
Following certain corporate events which are a “fundamental
change” (as defined under
“Description of Notes—Conversion Rights—Increase in Conversion Rate
upon Conversion upon a Make-whole Fundamental Change or during a
Redemption Period” in the preliminary prospectus
supplement) that occur prior
to the maturity date or if we issue a notice of redemption, we will
increase the conversion rate by reference to the table below, for a
holder who elects to convert its Notes in connection with such
fundamental change or who elects to convert its Notes called for
redemption during the related redemption period in certain
circumstances as described under “Description of Notes—Conversion
Rights—Increase in Conversion Rate upon Conversion upon a
Make-whole Fundamental Change or during a Redemption Period” in the
preliminary prospectus supplement.
The following table sets forth the number of additional shares
by which the conversion rate will be increased per $1,000 principal
amount of Notes:
|
|
|
Effective
Date/Redemption Notice Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 18,
2020
|
0.4167
|
0.3465
|
0.2467
|
0.1708
|
0.1362
|
0.0951
|
0.0810
|
0.0602
|
0.0453
|
0.0266
|
0.0160
|
0.0097
|
|
November 1,
2021
|
0.4167
|
0.3432
|
0.2384
|
0.1601
|
0.1250
|
0.0843
|
0.0707
|
0.0508
|
0.0370
|
0.0203
|
0.0114
|
0.0064
|
|
November 1,
2022
|
0.4167
|
0.3361
|
0.2257
|
0.1450
|
0.1099
|
0.0702
|
0.0574
|
0.0392
|
0.0272
|
0.0134
|
0.0066
|
0.0032
|
|
November 1,
2023
|
0.4167
|
0.3247
|
0.2070
|
0.1237
|
0.0890
|
0.0519
|
0.0406
|
0.0254
|
0.0161
|
0.0065
|
0.0025
|
0.0008
|
|
November 1,
2024
|
0.4167
|
0.3097
|
0.1789
|
0.0913
|
0.0582
|
0.0273
|
0.0192
|
0.0098
|
0.0050
|
0.0012
|
0.0001
|
0.0000
|
|
November 1,
2025
|
0.4167
|
0.3056
|
0.1389
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
|
The exact share prices and
effective dates or redemption notice dates may not be set forth in
the table above, in which case:
•
|
If the share price is between two
share prices in the table or the effective date or redemption
notice date, as the case may be, is between two effective dates or
redemption notice dates, as applicable, in the table, the number of
additional shares by which the conversion rate will be increased
will be determined by a straight-line interpolation between the
number of additional shares set forth for the higher and lower
share prices and the earlier and later effective dates or
redemption notice dates, as applicable, based on a 365-day
year.
|
•
|
If the share price is greater than $4,000.00 per share
(subject to adjustment in the same manner as the share prices set
forth in the column headings of the table above), no additional
shares will be added to the conversion rate.
|
•
|
If the share price is less than $900.00 per share (subject to
adjustment in the same manner as the share prices set forth in the
column headings of the table above), no additional shares will be
added to the conversion rate.
|
Notwithstanding the foregoing, in
no event will the conversion rate per $1,000 principal amount of
Notes exceed 1.1111 Class A Shares, subject to adjustment in the
same manner as the conversion rate as set forth under “Description
of Notes—Conversion Rate Adjustments” in the preliminary prospectus
supplement.
___________________
Concurrent Equity
Offering:
|
Concurrently with this offering,
we are offering 1,100,000 Class A Shares (or 1,265,000 Class A
Shares if the underwriters of such offering exercise in full their
option to purchase additional Class A Shares) at a price of $900.00
per Class A Share.
The completion of this offering
is not conditional upon the completion of the Concurrent Equity
Offering and the completion of the Concurrent Equity Offering is
not conditional upon the completion of this offering. The
Concurrent Equity Offering is expected to close on or about
September 18, 2020, the same
date as this offering is expected to close.
|
___________________
The Issuer has filed a registration
statement on Form F-10 (including a prospectus) with the United
States Securities and Exchange Commission (“SEC”) for the offering
to which this communication relates. Before you invest, you should
read the prospectus in that registration statement and other
documents the Company has filed with the SEC for more complete
information about the Company and the offering to which this
communication relates. The offering to which this communication
relates is being made only by means of a prospectus supplement and
accompanying base shelf prospectus. A copy of the prospectus
supplement and accompanying base shelf prospectus related to the
offering may be obtained from Citigroup, Attention: Citigroup, c/o
Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood,
NY 11717 (Tel: 800-831-9146); or Goldman Sachs & Co. LLC,
Attention: Prospectus Department, 200 West Street, New York, NY
10282 (Tel: 1-866-471-2526). Copies of the prospectus supplement
and accompanying base shelf prospectus may also be obtained for
free from www.sec.gov and www.sedar.com.
The Notes described herein will not
be listed on any securities exchange. There is currently no market
through which such securities may be sold and purchasers may not be
able to resell any such securities purchased under the applicable
prospectus supplement relating to such securities (the “Prospectus
Supplement”). This may affect the pricing of such securities in the
secondary market, the transparency and availability of trading
prices, the liquidity of such securities and the extent of issuer
regulation. See the ‘‘Risk Factors’’ section of the applicable
Prospectus Supplement.
Purchasers of securities should be
aware that the acquisition of securities may have tax consequences
both in the United States and in Canada. This document does not
discuss U.S. or Canadian tax consequences and any such tax
consequences may not be described fully in any applicable
Prospectus Supplement with respect to a particular offering of
securities. Prospective investors should consult their own tax
advisors prior to deciding to purchase any of the securities.
An investment in the securities
described herein involves significant risks that should be
carefully considered by prospective investors before purchasing
securities described herein. The risks outlined in the applicable
Prospectus Supplement, the short form base shelf prospectus of the
Issuer dated August 6, 2020 and in the documents incorporated by
reference therein should be carefully reviewed and considered by
prospective investors in connection with any investment in the
securities described herein.
___________________
ANY DISCLAIMERS OR OTHER NOTICES
THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND
SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE
AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING
SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
4