Constellation Software Inc. Declares Dividend and Files Final Prospectus in Relation to Previously Announced Rights Offering of Series 1 Debentures

TORONTO, Aug. 24, 2023 (GLOBE NEWSWIRE) -- Constellation Software Inc. (TSX: CSU) (the “Company”) announced today that it has declared a special dividend (the “Rights Dividend”) pursuant to which all common shareholders (the “Shareholders”) of record as of the close of business on September 1, 2023 (the “Record Date”) will be entitled to receive, by way of a dividend-in-kind, one right of the Company (each, a “Right”) for each common share of the Company (the “Common Shares”) held. This dividend has been designated as an eligible dividend for purposes of the Income Tax Act (Canada) and any similar provincial and territorial legislation.

The Company also announced that it has filed a final short form prospectus (the “Final Prospectus”) in relation to its previously announced rights offering (the “Rights Offering”) pursuant to which the Company will issue the Rights in satisfaction of the Rights Dividend that will entitle the Shareholders to purchase up to C$700 million aggregate principal amount of unsecured subordinated floating rate debentures, Series 1 of the Company (the “Series 1 Debentures”).

The Series 1 Debentures will be issued as an additional tranche of, and will form a single series with, the outstanding C$282.2 million aggregate principal amount of unsecured subordinated floating rate debentures, Series 1 of the Company. There is no minimum principal amount of Debentures that must be issuable upon the exercise of Rights.

The net proceeds of the Rights Offering are expected to be used by the Company to pay down indebtedness under its existing credit facility (the “Credit Facility”), with any remaining proceeds to be used for future acquisitions.

The Rights will be issued in satisfaction of the Rights Dividend in the amount of one Right per Common Share. For every 3.03 Rights held, the holder of such Rights will be entitled to subscribe for C$100 principal amount of Series 1 Debentures. The Rights and the Series 1 Debentures will be qualified for distribution in each province and territory of Canada by way of the Final Prospectus and the Debentures have been registered in the United States on Form F-7 under the United States Securities Act of 1933, as amended.

The Series 1 Debentures are expected to be issued on October 6, 2023 (the “Issue Date”) and will have the same terms and conditions as the currently outstanding unsecured subordinated floating rate debentures, Series 1 of the Company.

The Series 1 Debentures have a maturity date of March 31, 2040 (the “Maturity Date”). The Series 1 Debentures will be issuable only in denominations of C$100 and integral multiples thereof and, from and including the Issue Date to but excluding March 31, 2024, will bear interest at a rate of 13.3% per annum (the “Current Rate”). From and including March 31, 2024 to but excluding the Maturity Date, the interest rate applicable to the Series 1 Debentures will be reset on an annual basis on March 31 of each year, at a rate equal to the annual average percentage change in the All-items Consumer Price Index during the 12 month period ending on December 31 in the prior year (which amount may be positive or negative) plus 6.5% (the “Floating Interest Rate”). Notwithstanding the foregoing, the interest rate applicable to the Series 1 Debentures will not be less than 0%. Interest, if any, will be payable quarterly in arrears in equal instalments on March 31, June 30, September 30 and December 31 in each year. The Current Rate will only apply to the Series 1 Debentures in respect of the interest payments up to and including March 31, 2024. Effective March 31, 2024, the interest rate payable on the Series 1 Debentures will be based on the applicable Floating Interest Rate.