LONG BEACH, Calif .– (COMMERCIAL THREAD) – The Beauty Health Company (“BeautyHealth” or the “Company”; NASDAQ: SKIN) today announced its intention to offer, subject to market and other conditions, a total principal amount of $ 400,000,000 of Senior Convertible Notes due 2026 (the “Notes”) in a private offer to persons reasonably suspected of being Qualified Institutional Purchasers pursuant to Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). BeautyHealth also plans to grant the initial purchasers of the Notes an option to purchase, for settlement within 13 days of the date of the initial issuance of the Notes, up to an additional principal amount of $ 60,000,000. .
The Notes will be senior unsecured obligations of BeautyHealth, will bear interest payable semi-annually in arrears and will mature on October 1, 2026, unless redeemed, redeemed or converted earlier. Noteholders will be entitled to convert their Notes under certain circumstances and during specified periods. BeautyHealth will settle conversions by paying for or delivering, as the case may be, for cash, shares of its Class A common shares, with a par value of $ 0.0001 per share (the “Common Shares”), or a combination cash and shares of its ordinary shares, at the option of BeautyHealth. Tickets will be refundable, in whole or in part (subject to certain limitations), in cash at BeautyHealth’s option at any time, and from time to time, on or after October 6, 2024 and no later than the 40th trading day. expected immediately prior to the Maturity Date, but only if the last published sale price per share of BeautyHealth common stock exceeds 130% of the conversion price for a specified period of time and certain liquidity conditions have been met. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date. The interest rate, initial conversion rate and other terms of the Notes will be determined at the Offer Price.
BeautyHealth intends to use a portion of the net proceeds of the offering to fund the cost of completing the capped call transactions described below. BeautyHealth intends to use the remainder of the net proceeds of the offering to fund any future acquisitions, working capital expenses and general corporate purposes. If the initial buyers exercise their option to purchase additional tickets, BeautyHealth intends to use a portion of the additional net proceeds to fund the cost of entering into additional capped call transactions, as described below.
As part of ticket pricing, BeautyHealth expects to enter into privately negotiated capped call transactions with one or more of the Initial Buyers or their affiliates and / or other financial institutions (the “Option Counterparties”) . Capped purchase transactions are expected to cover, subject to customary anti-dilution adjustments, the number of BeautyHealth common shares that will initially underpin the ratings. If the initial purchasers exercise their option to purchase additional tickets, BeautyHealth expects to enter into additional capped purchase transactions with the option counterparties.
Capped purchase transactions should generally reduce the potential dilution of BeautyHealth common stock on any conversion of the Notes and / or offset any potential cash payment BeautyHealth is required to make in excess of the principal amount of the Converted Notes, depending on the case. , when converting notes. If, however, the market price per share of the ordinary shares of BeautyHealth, as measured under the terms of the capped call transactions, exceeded the ceiling price of the capped call transactions, there would nonetheless be dilution and / or there would be no offsetting these potential cash payments, in each case, to the extent that this market price exceeds the ceiling price of capped call transactions.
BeautyHealth has been informed that, as part of the establishment of their initial hedges of capped purchase transactions, the option counterparties or their respective affiliates are planning to enter into various derivative transactions relating to the ordinary shares of BeautyHealth and / or to purchase BeautyHealth common shares at the same time as or shortly after the pricing of the tickets. Such activity may increase (or reduce the magnitude of any decrease) in the market price of BeautyHealth common shares or the Notes at that time.
In addition, option counterparties or their respective affiliates may modify their hedging positions by entering into or unwinding various derivatives relating to the ordinary shares of BeautyHealth and / or by buying or selling ordinary shares of BeautyHealth or other securities. of BeautyHealth in connection with secondary market transactions following the pricing of the Notes and from time to time prior to the maturity of the Notes (and may do so after any conversion of the Notes, any redemption of the Notes by BeautyHealth to any Fundamental Change Redemption Date, any Redemption Date or any other date on which the Notes are withdrawn by BeautyHealth, in each case if BeautyHealth exercises the relevant election to terminate the relevant portion of the Capped Call Transactions). This activity could also cause or prevent an increase or decrease in the market price of BeautyHealth’s common shares or the Notes, which could affect the ability of Noteholders to convert the Notes and, to the extent that activity occurs. during any Observation Period related to a conversion of Notes, this could affect the number of Shares and the value of the Consideration Noteholders will receive on the conversion of the Notes.
The Notes will only be offered to persons reasonably suspected of being Qualified Institutional Purchasers in accordance with Rule 144A of the Securities Act. The offering and sale of the Notes and the Common Shares issuable upon conversion of the Notes have not been and will not be registered under the Securities Act or any other securities law, and the Notes and such shares may not be offered or sold except under an exemption or in connection with a transaction not subject to the registration requirements of the Securities Act and any other applicable securities law. This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes or the Common Shares issuable upon conversion of the Notes, nor will there be any sale of the Notes. or such actions, in any state or other jurisdiction in which such offer, sale or solicitation would be illegal.
About The Beauty Health Company
BeautyHealth is a category-creating beauty care company focused on bringing innovative products to market. Our flagship brand, HydraFacial, is a non-invasive and accessible health and beauty platform and ecosystem with a powerful community of estheticians, consumers and partners, connecting medical and consumer retail to democratize and personalize solutions. of skin care for the greatest number. A leader in health and beauty as a category creator, HydraFacial uses a unique delivery system to cleanse, extract and hydrate with its patented hydradermabrasion technology and super serums made with nourishing ingredients, delivering immediate results and creating an instantly rewarding glow. in just three steps and 30 minutes. HydraFacial® and Perk ™ products are available in more than 87 countries with more than 18,000 delivery systems worldwide and millions of treatments performed each year.
This press release includes forward-looking statements, including statements regarding the expected terms of the Notes offered, the completion, timing and size of the proposed offering and the intended use of the net proceeds and the expected terms and effects of entry into the capped call transactions described above. Forward-looking statements represent BeautyHealth’s current expectations regarding future events and are subject to known and unknown risks and uncertainties which could cause actual results to differ materially from those suggested by forward-looking statements. These risks and uncertainties include market conditions, including market interest rates, the price and volatility of BeautyHealth common shares and risks relating to BeautyHealth’s business, including those described in the periodic reports that BeautyHealth files from time to time with the Securities and Exchange Commission. BeautyHealth may not fulfill the proposed offer described in this press release and, if the proposed offer is made, cannot provide any assurance regarding the final terms of the offer or the ratings or its ability to effectively apply the net proceeds. as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and BeautyHealth does not undertake to update the statements included in this press release for subsequent developments, unless the law requires it.