Concur Technologies Inc (CNQR) announced pricing of $250 million aggregate principal amount of 2.5% convertible senior notes due in 2015.
The company also granted a green-shoe option to subscribers up to an additional $37.5 million aggregate principal amount of notes primarily to cover over-allotments.
The notes have an initial conversion rate of 19.10 shares of common stock for every $1,000 principal amount of notes. This represents an initial effective conversion price of $52.35 per share. The notes will be unsecured, unsubordinated obligations of Concur and interest will be payable semi-annually at the rate of 2.5% per year.
Concur estimates that the net cash flow from the offering will be approximately $242.5 million (or approximately $279.0 million, if the initial purchasers exercise in full their option to purchase additional notes) after payment of the initial purchasers’ discounts and offering expenses.
Concur expects to use the net proceeds of the convertible note offering for general corporate purposes, including acquisitions and strategic transactions.
Concur’s solutions are quick, easy and affordable. Most companies are able to fully deploy Concur’s services within a matter of weeks. Its on-demand Employee Spend Management solutions are easy for employees to use, so adoption is rapid. It has low set up costs, with low monthly subscriptions. There is no cost of upgrades, which ultimately results in low total cost of ownership.
With an overall customer retention rate of over 95%, Concur leads the industry in client satisfaction by continuing to deliver ever-increasing value to each and every client it serves.
We believe the market for corporate travel and expense management services is large and under-penetrated. The company intends to continue investing in the growth of its customer base and increasing its market penetration by significantly expanding its direct sales force, collaborating with and growing its strong partner network and expanding geographically. The company has already sold its products and services to the top 100 Fortune 500 companies. Its customers range from large global public companies with more than 200,000 employees to smaller, single-location private companies. Concur is adequately diversified with no single customer accounting for more than 10% of its total revenues in recent years.
The company has a well-defined software development methodology, allowing it to deliver products that satisfy business needs and meet commercial quality expectations. Its systems development and programming group teams up with the marketing department to assess market needs and requirements. It also uses independent development firms or contractors, when needed, to expand the capacity and technical expertise of its internal research and development team.
We currently have a Neutral recommendation on CNQR.
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