8-KMaterial AgreementsFinancial EventsOther Events+1

Expedia Group, Inc. 8-K Report, Material Agreement (Jun 3, 2015)

Filed June 3, 2015For Securities:EXPE

Summary

Expedia, Inc. (EXPE) filed an 8-K on June 3, 2015, to report the successful completion of a significant debt offering. The company issued €650,000,000 in 2.500% Senior Notes due 2022. The net proceeds from this offering amounted to approximately $700.2 million, after accounting for underwriting discounts and expenses. The primary purpose for the use of these proceeds is to fund a portion of the cash consideration for the then-proposed acquisition of Orbitz Worldwide, Inc. Additionally, the remaining funds are allocated for general corporate purposes, which could include future acquisitions, dividends, stock repurchases, debt repayment, investments, working capital, capital expenditures, and subsidiary advances. This debt issuance provides Expedia with substantial capital to fuel its strategic growth initiatives, particularly the significant Orbitz acquisition.

Key Highlights

  • 1Expedia, Inc. successfully closed a debt offering of €650 million (approximately $700.2 million net proceeds) in 2.500% Senior Notes due 2022.
  • 2The offering was completed on June 3, 2015, with the Underwriting Agreement dated May 28, 2015.
  • 3The net proceeds are earmarked primarily to finance part of the cash consideration for the acquisition of Orbitz Worldwide, Inc.
  • 4Funds will also be used for general corporate purposes, including potential future acquisitions, dividends, share buybacks, and debt repayment.
  • 5The Notes are senior unsecured obligations of Expedia, Inc., guaranteed by certain domestic subsidiaries.
  • 6The Notes mature on June 3, 2022, and carry an annual interest rate of 2.500%.
  • 7The offering was made pursuant to Expedia's existing registration statement on Form S-3.

Frequently Asked Questions

The primary purpose of the €650 million senior notes offering was to fund a portion of the cash consideration required for Expedia's proposed acquisition of Orbitz Worldwide, Inc. Additional funds were designated for general corporate purposes.

The notes bear an annual interest rate of 2.500%, mature on June 3, 2022, and are senior unsecured obligations of Expedia, Inc., guaranteed by certain domestic subsidiaries. The company has the option to redeem the notes under specified conditions, including a make-whole premium before March 3, 2022, and at par thereafter. Holders have a repurchase right upon a change of control triggering event.

Expedia issued €650,000,000 aggregate principal amount of Senior Notes. After deducting underwriting discounts, commissions, and offering expenses, the net proceeds were approximately $700.2 million, based on the euro/U.S. dollar exchange rate at the time.

The Indenture governing the notes contains covenants that limit Expedia's and its subsidiaries' ability to create certain liens, engage in sale and lease-back transactions, and consolidate, merge, or transfer substantially all of its assets, subject to certain exceptions.