Array Technologies, Inc. (NASDAQ: ARRY) recently closed an upsized private offering of $345 million in aggregate principal amount of its 2.875% convertible senior notes due July 2031. The net proceeds from the offering amounted to approximately $334 million. The company used a portion of the net proceeds, along with approximately $12.1 million cash on hand, to fully repay the approximately $232.8 million of outstanding indebtedness under its term loan facility. Additionally, about $35.1 million of the net proceeds were allocated to fund the cost of entering into capped call transactions, and a portion of the net proceeds was used to fund repurchases of approximately $100 million in aggregate principal amount of its outstanding 1.00% convertible senior notes due 2028 for approximately $78.3 million in cash, plus accrued and unpaid interest.
The capped call transactions entered into in connection with the offering are expected to generally reduce potential dilution to the common stock upon conversion of the notes or to offset any cash payments the company is required to make in excess of the principal amount of converted notes, with the reduction or offset subject to a cap initially equal to $12.74 per share. The capped calls have an initial strike price of $8.12 per share, subject to adjustments, which corresponds to the initial conversion price of the notes.
The company anticipates total annual net interest expense savings resulting from these transactions to be approximately $9 million, enhancing free cash flow generation.
Array Technologies, Inc. also announced that the offering represents the aggregate of both the previously announced upsized offering of $300 million, as well as the full exercise of the $45 million option to purchase additional notes granted by Array to the initial purchasers of the notes.
Kevin G. Hostetler, Chief Executive Officer of Array, expressed that this successful offering marks a significant milestone in the company's ongoing efforts to strengthen its capital structure and position the company for long-term growth. H. Keith Jennings, Chief Financial Officer of Array, noted that they are pleased with the strong demand for the convertible notes offering, enabling them to upsize the transaction and optimize their balance sheet.
Array Technologies, Inc. is a leading global provider of solar tracking technology to utility-scale and distributed generation customers. The company's solutions are engineered to withstand harsh weather conditions, and its high-quality solar trackers, software platforms, and field services combine to maximize energy production. Array is rooted in manufacturing and driven by technology, relying on its domestic manufacturing, diversified global supply chain, and customer-centric approach to design, deliver, commission, train, and support solar energy deployment around the world. As a result of these announcements, the company's shares have moved -0.92% on the market, and are now trading at a price of $6.44. If you want to know more, read the company's complete 8-K report here.
