Cerence Inc. Prices Offering of $190 Million 1.50% Convertible Senior Notes due 2028 - Seite 2

The notes will be convertible at the option of holders, subject to certain conditions and during certain periods, into cash, shares of Cerence’s common stock or a combination of cash and shares of Cerence’s common stock, with the form of consideration determined at Cerence’s election. Holders of the notes will have the right to require Cerence to repurchase all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain events. The conversion rate will initially be 24.5586 shares of Cerence’s common stock per $1,000 principal amount of notes (which is equivalent to an initial conversion price of approximately $40.72 per share of Cerence’s common stock). The initial conversion price of the notes represents a premium of approximately 22.5% over the last reported sale price of Cerence’s common stock of $33.24 per share on June 21, 2023.

When issued, the notes will be Cerence’s senior unsecured obligations and will rank senior in right of payment to any of Cerence’s indebtedness that is expressly subordinated in right of payment to the notes; equal in right of payment to any of Cerence’s liabilities that are not so subordinated; effectively junior in right of payment to any of Cerence’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of Cerence’s subsidiaries.

Cerence estimates that the net proceeds from the offering of notes will be approximately $184.1 million (or approximately $203.6 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers’ discounts and estimated offering expenses payable by Cerence.

Cerence intends to use approximately $102.0 million of the net proceeds from the offering to finance the concurrent repurchase of a portion of its 3.00% convertible senior notes due 2025 (the “2025 notes”) as described below. Cerence intends to use the remaining net proceeds from the offering, together with up to approximately $24.7 million that Cerence will borrow under its revolving credit facility to the extent the initial purchasers do not exercise their option to purchase additional notes in full, to repay approximately $106.8 million under its term loan facility, which amount constitutes all of the borrowings and accrued and unpaid interest thereunder. Cerence intends to use the additional remaining net proceeds from the offering, if any, for general corporate purposes.