GRPN
Groupon, INC
NASDAQ
8-K: Groupon Secures $197 Million in Financing Through Debt Exchange and New Note Issuance
Sentiment:
Financing Announcement
12 November 2024 4:50 PM
Groupon has entered into agreements to exchange existing convertible notes and issue new secured notes, raising $197 million in total.
Capital raise
Groupon is raising $20 million in gross cash proceeds through the issuance of new 2027 convertible secured notes.
The company is also exchanging $176.26 million of existing 2026 notes for new 2027 notes, which is a form of capital restructuring.
Summary
- Groupon has entered into agreements to exchange $176.26 million of its 2026 convertible notes for new 2027 convertible secured notes.
- The company will also issue $21 million of the new 2027 notes for $20 million in cash, representing a 95% issue price.
- The total amount of 2027 notes issued will be $197.26 million.
- The 2027 notes will bear interest at 6.25% per annum, payable semi-annually, and will mature on March 15, 2027.
- The notes are convertible into common stock at a price of approximately $30 per share, subject to adjustments.
- The company intends to use the net proceeds from the new note issuance for general corporate purposes.
- The transaction is expected to close around November 19, 2024.
Sentiment
Score: 6
Explanation: The sentiment is moderately positive. While the company is taking steps to improve its financial position and extend its debt maturity, the higher interest rate on the new notes and the discount on issuance are concerning. The management's optimism is a positive sign, but the company still faces challenges.
Positives
- The financing transaction provides Groupon with $20 million in cash for general corporate purposes.
- The exchange of existing debt for new debt extends the maturity profile of Groupon's debt.
- The new notes are secured, which may provide additional comfort to investors.
- The conversion price of approximately $30 per share represents a significant premium over the current trading price.
Negatives
- The new notes carry a higher interest rate of 6.25% compared to the 1.125% on the exchanged notes.
- Failure to meet certain post-close covenants related to asset sales and pledges will result in an additional 2.5% interest rate on the 2027 notes.
- The company is issuing the new notes at a discount, receiving $20 million for $21 million in principal amount.
Risks
- Groupon's ability to meet the post-close covenants related to asset sales and pledges is a risk.
- The company's financial performance may impact its ability to service the new debt.
- The conversion of the notes could dilute existing shareholders if the stock price rises significantly.
- The 2027 Notes are secured by a first priority security interest in substantially all of the assets of Groupon and the Guarantors, subject to certain exceptions and permitted liens.
Future Outlook
Groupon's management is optimistic about the future, citing progress in platform transformation and customer experience enhancement. They are committed to continuous improvement and innovation.
Management Comments
- Dusan Senkypl, Chief Executive Officer of Groupon, stated, 'Despite some challenges, I'm optimistic about our future.'
- Dusan Senkypl also said, 'The progress we've made in transforming our platform and enhancing our customer experience is laying the groundwork for sustainable growth.'
- He added, 'Our International Local business is showing promising signs, and the positive response to our new features like gifting and video content reinforces our belief that we're on the right path.'
Industry Context
The financing transaction comes as Groupon is working to transform its platform and enhance its customer experience. The company is facing challenges in its international local business, but is seeing positive responses to new features. The debt exchange and new note issuance are part of a broader strategy to manage its capital structure and fund its operations.
Comparison to Industry Standards
- Groupon's revenue of $114.5 million is lower than some of its larger e-commerce competitors, such as Amazon or eBay, but it operates in a different niche focusing on local experiences and services.
- The company's adjusted EBITDA of $14.8 million is a positive sign, but it is still relatively small compared to larger tech companies.
- The debt exchange and new note issuance are a common strategy for companies looking to manage their debt and extend their maturity profile, similar to what other companies in the tech and retail sectors have done.
- The 6.25% interest rate on the new notes is higher than what some larger, more established companies might pay, reflecting Groupon's risk profile.
Stakeholder Impact
- Shareholders may experience dilution if the 2027 notes are converted into common stock.
- Creditors will have a secured claim on the company's assets.
- Employees may be impacted by the company's financial performance and strategic decisions.
- Customers may benefit from the company's platform improvements and new features.
Next Steps
- The company expects to close the transaction on or around November 19, 2024.
- Groupon will enter into an indenture establishing the terms of the 2027 Notes.
- The company will also enter into a security agreement to secure the 2027 Notes.
- Groupon will participate in virtual investor conferences in November and December 2024.
Key Dates
- November 12, 2024: Date of the Exchange and Subscription Agreements.
- November 19, 2024: Expected closing date of the financing transaction.
- November 20, 2025: Deadline for pledging SumUp equity or triggering additional interest on the 2027 Notes.
- March 15, 2025: First interest payment date for the 2027 Notes.
- December 15, 2026: Date after which the 2027 Notes can be converted regardless of stock price conditions.
- March 15, 2027: Maturity date of the 2027 Notes.
Keywords
convertible notes, debt financing, secured notes, debt exchange, capital raise, 2027 notes, 2026 notes, Groupon, GRPN
GRPN
Groupon, INC
NASDAQ
Sector: Communication Services
Filings with Classifications
Capital raise
18 June 2025 7:29 AM
Financing Transaction Announcement
- The company is issuing $244,071,000 aggregate principal amount of new 4.875% Convertible Senior Notes due 2030 in exchange for existing notes. While it's an exchange and not a cash raise, it is a form of capital restructuring that impacts the company's debt capital.
Delay expected
17 June 2025 3:40 PM
Insider Transaction Report
- The Form 4 was filed late due to an inadvertent administrative oversight.
Delay expected
17 June 2025 3:39 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an inadvertent administrative oversight.
Delay expected
17 June 2025 3:39 PM
Insider Transaction Report
- The Form 4 was filed late due to an inadvertent administrative oversight.
Delay expected
16 June 2025 3:48 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an "inadvertent administrative oversight."
Worse than expected
5 June 2025 1:29 PM
Insider Transaction Report
- The Form 4 was filed late, indicating a lapse in regulatory compliance due to an inadvertent administrative oversight.
Delay expected
5 June 2025 1:29 PM
Insider Transaction Report
- The Form 4 filing itself was delayed, submitted late due to an inadvertent administrative oversight.
Delay expected
4 June 2025 5:36 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an inadvertent administrative oversight, as stated in the filing.
Better than expected
27 May 2025 1:31 PM
Insider Transaction Report Amendment
- The vesting of 109,250 Performance Share Units indicates that Groupon successfully met a pre-established stock price hurdle, which is a positive performance indicator for the company's stock.
Worse than expected
7 May 2025 4:11 PM
Earnings Press Release
- Global revenue decreased by 5% year-over-year, indicating a decline in overall sales performance.
- Adjusted EBITDA decreased from $19.5 million to $15.3 million, suggesting a decrease in profitability.
Worse than expected
7 May 2025 4:11 PM
Quarterly Report
- Revenue decreased from $123.08 million to $117.19 million, indicating a worse than expected performance.
- Adjusted EBITDA decreased from $19.52 million to $15.33 million, indicating a worse than expected performance.
Worse than expected
28 April 2025 4:07 PM
Proxy Statement
- The company reported a net loss of $57 million in 2024.
- The adjusted EBITDA goal for the 2024 Annual Bonus Plan remained below threshold.
Worse than expected
11 March 2025 4:13 PM
Earnings Release
- While North America Local billings showed positive growth, overall revenue, gross billings, and unit sales decreased year-over-year, and the company reported a net loss for both the quarter and the full year.
Worse than expected
11 March 2025 4:12 PM
Annual Results
- Gross billings, units, revenue, and gross profit all decreased year-over-year, indicating a decline in overall business activity.
Capital raise
19 November 2024 4:10 PM
Debt Issuance Announcement
- The document details a capital raise of $20 million through the issuance of convertible senior secured notes.
- The total issuance was $197.26 million, with the majority being an exchange of existing debt.
Worse than expected
12 November 2024 4:51 PM
Quarterly Report
- The company's revenue, gross profit, and adjusted EBITDA all decreased compared to the same period last year, indicating worse than expected results.
Capital raise
12 November 2024 4:51 PM
Quarterly Report
- The company completed an $80 million fully backstopped rights offering in January 2024.
- The company entered into exchange and subscription agreements for $197.3 million of new convertible senior secured notes due 2027.
Delay expected
12 November 2024 4:51 PM
SEC Form 4 Filing
- The Form 4 filing was submitted late due to an inadvertent administrative oversight.
Capital raise
12 November 2024 4:50 PM
Financing Announcement
- Groupon is raising $20 million in gross cash proceeds through the issuance of new 2027 convertible secured notes.
- The company is also exchanging $176.26 million of existing 2026 notes for new 2027 notes, which is a form of capital restructuring.
Better than expected
30 July 2024 4:19 PM
Quarterly Report
- The company reported a smaller net loss compared to the same quarter last year.
- The company achieved positive operating and free cash flow.
- North America local revenue grew by 7% year-over-year.
Worse than expected
30 July 2024 4:18 PM
Quarterly Report
- The company's revenue decreased slightly year-over-year, indicating a worse performance than expected in terms of top-line growth.
Better than expected
9 May 2024 4:09 PM
Quarterly Report
- The company's results were better than expected as they exceeded the high end of guidance.
- The company achieved its first consolidated revenue growth since 2016.
- Adjusted EBITDA turned positive, a significant improvement from the previous year.
Capital raise
9 May 2024 4:06 PM
Quarterly Report
- The company completed an $80 million fully backstopped rights offering in January 2024.
- The rights offering was fully backstopped by Pale Fire Capital SICAV a.s.
Worse than expected
9 May 2024 4:06 PM
Quarterly Report
- While the net loss improved, the company still reported a loss and gross billings decreased, indicating worse than expected performance.
Capital raise
7 May 2024 9:26 AM
Executive Appointment and Compensation Announcement
- The company is seeking stockholder approval to increase the number of shares available under the 2011 Incentive Plan by 7,000,000 shares.
- This increase is necessary to cover the PSU awards granted to the CEO and CFO, as well as future awards to other employees.
Capital raise
29 April 2024 5:25 PM
Proxy Statement
- The Pale Fire Parties amended and restated the Standstill Agreement to (a) modify the termination date from the earlier to occur of forty-five days following the date on which Mr.
- Senkypl shall cease to serve for any reason as Interim Chief Executive Officer or Chief Executive Officer of the Company to December 31, 2024; and (b) exclude any and all shares of common stock purchased by the Pale Fire Parties in connection with (i) their exercise of basic subscription rights prior to the expiration of the Rights Offering, (ii) fully purchasing any and all unsubscribed shares in the Rights Offering following its expiration, and (iii) the exercise of their over-subscription privileges, if applicable, from the Pale Fire Parties existing 25% beneficial ownership limitation.
Capital raise
15 March 2024 7:05 AM
Quarterly Report
- In January 2024, Groupon closed a fully backstopped Rights Offering that was oversubscribed and raised $80.0 million.
Better than expected
15 March 2024 7:05 AM
Quarterly Report
- The company's Q4 results were better than expected, with positive net income and adjusted EBITDA, which is a significant improvement from previous quarters.
- The company also resolved its going concern issue, which was a major concern in previous periods.
Worse than expected
15 March 2024 6:58 AM
Annual Results
- The document outlines numerous risks and challenges, suggesting that the company's future performance may be worse than expected.
Capital raise
14 February 2024 7:29 PM
Debt Repayment Announcement
- Groupon conducted an $80 million fully backstopped rights offering.
- The rights offering was made available to all holders of record of the company's common stock.
- The proceeds from the rights offering were used to repay debt and for general corporate purposes.
Capital raise
22 January 2024 8:30 AM
Capital Raise Announcement
- Groupon completed an $80 million rights offering.
- The offering was fully backstopped and significantly oversubscribed.
- The company issued 7,079,646 shares at $11.30 per share.
Better than expected
12 January 2024 8:41 AM
Business Update
- The company expects Q4 2023 results to be at or above the high end of guidance, indicating better than expected performance.
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