PAR Technology Secures $100 Million in Funding Through Convertible Notes Offering
NEW HARTFORD, N.Y. (January 22, 2025) – PAR Technology Corporation (NYSE: PAR) has announced the pricing of a private offering of $100 million in 1.00% Convertible Senior Notes due 2030. The notes, which are set to mature on January 15, 2030, will be sold to qualified institutional buyers under Rule 144A.
The initial purchaser has the option to buy an additional $15 million in notes. The notes will accrue interest at an annual rate of 1.00%, with payments made semi-annually. They’re convertible into PAR’s common stock at an initial rate of 10.3089 shares per $1,000 in principal amount, equivalent to approximately $97.00 per share, representing a 32.5% premium.
The company anticipates net proceeds of about $96.7 million from the offering, which it plans to allocate primarily to repay the $90 million Blue Owl Term Loan, including accrued interest and any prepayment premiums. The remaining funds will be used for wider corporate objectives, including the potential acquisition of or investment in complementary companies, products, or technologies.
Key Terms of the Offering
- Interest Rate: 1.00% per annum.
- Maturity Date: January 15, 2030.
- Conversion Rate: 10.3089 shares per $1,000 principal amount (approximately $97.00 per share).
- Conversion Premium: 32.5% above the last reported sale price of PAR common stock as of January 21, 2025.
- Use of Proceeds: Primarily to repay the Blue Owl Term Loan, with the remainder for general corporate purposes.
Strategic Implications and Analyst Insights
The offering of convertible notes is a strategic financial move for PAR Technology. This maneuver benefits from a low interest rate in the current financial environment. Securing the low 1% interest rate signals confidence from institutional investors in PAR’s future.
The conversion premium protects against immediate shareholder dilution by providing a balance between potential upside and downside. The decision to use the funds to pay off the Blue Owl Term Loan suggests a strategy to improve the balance sheet. This could potentially offer better financial conditions than the existing term loan.
Furthermore, the extended maturity date provides greater operational flexibility, which could aid in the long-term growth of the company. The convertible structure is strategically positioned for the restaurant tech sector, allowing for lower-cost financing and the possibility of investor participation in future growth.
The terms and restrictions on conversion will give the company a clearer view of operations in the mid-term.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.
