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EmailTaking advantage of record low interest rates, CalAmp, based in Oxnard, has priced an offering of $150 million in convertible notes due in 2020.
The company, which posted record revenues of $250.6 million on strong demand for its wireless products and services, said it increased the offer from $125 million announced initially; the interest rate will be 1.625 percent and based on demand the offering could be increased by an additional $22.5 million. It is expected to close May 6. All the additional allotments are exercised. The $172.5 million offering would be one of the largest convertible debt deals by a company based in the region in the past several years.
CalAmp said that assuming the maximum offering, $13.4 million, will be used to purchase financial instruments to hedge against future market fluctuations with about $146 million available to fund future activities including possible acquisitions.
CalAmp has been growing quickly thanks to a new suite of software, equipment and services geared toward fleet management and the heavy equipment sector. The company’s shares have mounted a comeback in recent years as it diversified from a wireless components maker to offering a range of products that help companies track where their fleets or other equipment are and how they are being used.
The company, which has virtually no long-term debt, will have quite a war chest when the deal closes. At the end of the 2015 fiscal year on Feb. 28, it had $44 million in cash and marketable securities on hand after generating more than $28 million in cash for the year. Net cash to the company from the debt offering would put its cash levels at roughly $190 million.
