BALTIMORE, May 21, 2020 /PRNewswire/ -- Under Armour,
Inc. (NYSE: UA, UAA) today announced that it proposes to offer
$400 million aggregate principal
amount of its convertible senior notes due 2024 (the "notes"),
subject to market conditions and other factors. The notes are to be
offered in a private offering to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"). Under
Armour also intends to grant to the initial purchasers of the notes
an option to purchase, within a thirteen day period beginning on,
and including, the first date on which the notes are issued, up to
an additional $60 million aggregate
principal amount of the notes.
The notes will be senior, unsecured obligations of Under Armour,
bearing interest semiannually in arrears. The notes will mature on
June 1, 2024 unless they are
redeemed, repurchased or converted prior to such date. Prior to
January 1, 2024, the notes will be
convertible at the option of holders only during certain periods
and upon satisfaction of certain conditions. On or after
January 1, 2024, the notes will be
convertible at the option of the holders at any time until the
close of business on the second scheduled trading day immediately
preceding the maturity date. Upon conversion, the notes may be
settled in shares of Under Armour Class C common stock, cash or a
combination thereof, at Under Armour's election.
The interest rate, initial conversion rate, offering price and
other terms of the notes are to be determined by negotiations
between Under Armour and the initial purchasers.
Under Armour intends to use a portion of the net proceeds from
the offering of the notes to pay the cost of the capped call
transactions described below. If the initial purchasers exercise
their option to purchase additional notes, Under Armour intends to
use a portion of the net proceeds from the sale of the additional
notes to pay the cost of entering into additional capped call
transactions. Under Armour intends to use the remaining net
proceeds from the offering to repay indebtedness outstanding under
its revolving credit facility and pay related fees and
expenses.
In connection with the pricing of the notes, Under Armour
expects to enter into privately negotiated capped call transactions
with one or more of the initial purchasers of the notes and/or
their respective affiliates and/or other financial institutions
(the "capped call counterparties"). The capped call transactions
are expected generally to reduce potential dilution to Under Armour
Class C common stock upon conversion of the notes and/or offset the
potential cash payments that Under Armour could be required to make
in excess of the principal amount of any converted notes upon
conversion thereof, with such reduction and/or offset subject to a
cap. If the initial purchasers exercise their option to purchase
additional notes, Under Armour expects to enter into additional
capped call transactions with the capped call counterparties that
are expected generally to offset potential dilution and/or
potential cash payments relating to additional notes issued upon
exercise of the option to purchase additional notes.
In connection with establishing their initial hedges of the
capped call transactions, the capped call counterparties have
advised Under Armour that they and/or their respective affiliates
expect to enter into various derivative transactions with respect
to Under Armour Class C common stock and/or purchase Under Armour
Class C 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 Under Armour Class C
common stock or the notes concurrently with, or shortly after, the
pricing of the notes.
In addition, the capped call counterparties and/or their
respective affiliates may modify their hedge positions by entering
into or unwinding various derivatives with respect to Under Armour
Class C common stock and/or purchasing or selling Under Armour
Class C common stock, the notes or other of Under Armour's
securities or instruments (if any) 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 a conversion of a note). This activity could affect the
market price of Under Armour Class C common stock or the notes,
which could affect noteholders' ability to convert the notes and,
to the extent the activity occurs during any observation period
related to a conversion of notes, it could affect the amount and
value of the consideration that noteholders will receive upon
conversion of such notes.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities (including the shares of
Under Armour Class C common stock, if any, into which the notes are
convertible) and shall not constitute an offer, solicitation or
sale in any jurisdiction in which such offer, solicitation or sale
is unlawful. Any offers of the notes (and the shares of Under
Armour Class C common stock, if any, into which the notes are
convertible) will be made only 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 offer and sale of the notes and any shares of Under Armour
common stock issuable upon conversion of the notes have not been
registered under the Securities Act, or any state securities laws,
and the notes and any such shares may not be offered or sold in
the United States absent
registration or an applicable exemption from such registration
requirements.
About Under Armour, Inc.
Under Armour, Inc., headquartered in Baltimore, Maryland, is a leading inventor,
marketer and distributor of branded athletic performance apparel,
footwear and accessories. Powered by one of the world's largest
digitally connected fitness and wellness communities, Under
Armour's innovative products and experiences are designed to help
advance human performance, making all athletes better.
Forward-Looking Statements
Some of the statements contained in this press release
constitute forward-looking statements. Forward-looking statements
relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts, such as
statements regarding Under Armour's expectations related to the
offering discussed in this press release. In many cases, you can
identify forward-looking statements by terms such as "may," "will,"
"should," "expects," "plans," "assumes," "anticipates," "believes,"
"estimates," "predicts," "outlook," "potential" or the negative of
these terms or other comparable terminology. The forward-looking
statements contained in this press release reflect Under Armour's
current views about future events and are subject to risks,
uncertainties, assumptions and changes in circumstances that may
cause events or Under Armour's actual activities or results to
differ significantly from those expressed in any forward-looking
statement. Although Under Armour believes that the expectations
reflected in the forward-looking statements are reasonable, it
cannot guarantee future events, results, actions, levels of
activity, performance or achievements. Readers are cautioned not to
place undue reliance on these forward-looking statements. Under
Armour discusses many of these risks in greater detail under the
heading "Risk Factors" in the quarterly and annual reports that
Under Armour files with the Securities and Exchange Commission
(SEC). The forward-looking statements contained in this press
release reflect Under Armour's views and assumptions only as of the
date of this press release. Under Armour undertakes no obligation
to update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events.
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SOURCE Under Armour, Inc.