The Firm is representing affiliates of Silver Lake in their announced strategic investment in Zuora Inc. (NYSE: ZUO). Affiliates of Silver Lake will purchase $400 million of 3.95%/5.5% Convertible Senior PIK Toggle Notes due 2029 (the “notes”), with an initial conversion price of $20 per share. Under the terms of the agreement, upon the initial closing on or about March 24, 2022, Silver Lake will purchase $250 million aggregate principal amount of the notes with the remaining $150 million purchase expected to close within 18 months of the initial closing. Zuora has also agreed to issue Silver Lake warrants to purchase up to 7,500,000 shares of Class A Common Stock, exercisable for a period of seven years, and of which (i) 2,500,000 shares shall be exercisable at $20 per share, (ii) 2,500,000 shares shall be exercisable at $22 per share and (iii) 2,500,000 shares shall be exercisable at $24 per share. The transaction is subject to customary closing conditions.
Zuora provides a cloud-based subscription management platform, architected specifically for dynamic, recurring business models. Zuora’s solution enables companies across multiple industries and geographies to launch, manage and scale a subscription business, automating the entire subscription order-to-revenue process, including billing, collections and revenue recognition.
The Simpson Thacher team included Ken Wallach, Sunny Cheong, Ashley Yoon and Bethany Wong (Capital Markets); Jonathan Lindabury, Jennifer Levitt and Mimi Cheng (Banking and Credit); Russell Light and Edward Grais (Tax); Lori Lesser, Samuel Watters and Bobbie Burrows (Intellectual Property); and Jennifer Nadborny (Public Company Advisory Practice).