Envestnet rises after upsized debt deal, activist investor push for cost cuts
15/11/2022 19:55
** Envestnet Inc's ENV.N shares up 2.4% at $56.70 after co
raises more capital than targeted and activist investor pushes
for cost cuts
** Wealth management fintech early Tues priced $500 mln
2.625% 5-yr convertible bonds (CBs)
** Deal size boosted from $350 mln; conversion price of
$73.37 represents 32.5% premium to stock's Mon close
** Co plans to use net offering proceeds and cash to
repurchase some of its outstanding CBs, pay cost of capped call
transactions, remainder for general corp purposes
** Also early Tues, hedge fund Impactive Capital, which owns
~4 mln shares for 7.2% stake, eyes proxy fight amid ENV's
sluggish stock price performance
** "During our engagement over the past 18 months, we have
been clear that we believe Envestnet is a high-quality business
that is not achieving adequate margins, returns, and its full
potential value," Impactive says in letter to co's board
** ENV last Tues forecasted Q4 rev of $294-$296 mln and adj
EPS of 42-43 cents, below Refinitiv IBES estimates of $306 mln
and 47 cents/sh, respectively
** With move on the session, shares have lost ~29% YTD vs
S&P 400 Application Software index's .SPMDCCMSF ~2% decline
(Lance Tupper is a Reuters market analyst. The views expressed
are his own)
((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-332-219-1430))