#USA #Envestnet #Berwyn #Convertible Notes #Merger Agreement

Envestnet Inc. Implements Essential Changes Following Merger

Envestnet, Inc., a prominent player in the wealth management technology sector, has made substantial moves concerning its convertible notes in light of a recent merger agreement. This strategic decision aligns with its ongoing efforts to innovate and enhance shareholder value.

On November 26, 2024, Envestnet disclosed the merger with BCPE Pequod Buyer, Inc., along with its wholly-owned subsidiary, BCPE Pequod Merger Sub, Inc. This merger is part of a broader strategy to facilitate growth and streamline operations. Post-merger, shareholders of common stock in Envestnet received a cash payout of $63.15 for each share held, except for specific excluded categories outlined in the agreement. With this merger, Envestnet aims to solidify its position in the market, focusing on providing superior services to wealth managers.

Impact on Convertible Notes

The merger also triggered a Share Exchange Event, significantly affecting its existing 0.75% Convertible Notes due in 2025 and 2.625% Convertible Notes due in 2027. As a result, the company's Indentures were modified to reflect these changes, creating a 'Make-Whole Fundamental Change'. This will alter the conversion rights associated with the convertible notes.

Prior to the merger, holders of the convertible notes could convert their principal amounts into a predetermined number of shares. However, following the merger's effective date, this right has transitioned to converting the notes into units of Reference Property, adjusting the conversion rates accordingly. For instance, during a certain designated period post-merger, the conversion rate for the 2027 Notes will see a notable increase, offering more potential returns to investors. Specifically, this conversion rate has been adjusted from 13.6304 units of Reference Property to 16.9277 units of Reference Property per $1,000 principal amount.

Conversion Period and Additional Details

Holders of the convertible notes have the option to convert their bonds at any time from the effective merger date up until the business day preceding a future Fundamental Change Purchase Date. Furthermore, the cash amount for those notes that are converted will be fixed at $591.602 for the 2025 Notes and $1,068.984 for the 2027 Notes.

It's important to note that this conversion right is distinct from a holder's ability to request a purchase of their notes in the event of a fundamental change. Any holder wishing to initiate such a request must formally withdraw the purchase notice to proceed with conversion of their notes.

Guidance for Holders

Envestnet encourages all holders to meticulously review the modified Indentures and consult with advisors to fully understand the implications of this merger and the associated note adjustments. The company emphasizes that neither it nor its affiliates is offering specific recommendations regarding the decisions to convert or sell the notes.

With these developments, Envestnet positions itself not only for immediate operational enhancements but also for fostering long-term growth trajectories within the wealth management sphere. With cutting-edge technology and a commitment to client service, the company remains a trusted partner for numerous financial entities across the nation.

For inquiries related to the conversion of these notes or further assistance, holders can reach out to U.S. Bank Trust Company, National Association, acting as the trustee and paying agent, facilitating a smooth transition during these significant corporate changes.

About Envestnet

Founded over 25 years ago, Envestnet continues to lead the evolution of wealth management technologies. Serving more than 111,000 advisors and managing over $6.5 trillion in platform assets, Envestnet is committed to transforming the delivery of financial advice. Its comprehensive solutions and connected technology ecosystems are designed to empower wealth managers and enhance client outcomes.

In conclusion, the recent merger and adjustments to the convertible notes represent a critical phase for Envestnet, cementing its commitment to innovation and increased profitability in the wealth management space.