GSI Commerce Inc. completed its private offering of an aggregate of $150 million principal amount of unsecured 2.5% convertible senior notes due June 1, 2027, which includes the exercise of the initial purchaser's over-allotment option to purchase an additional $25 million of notes.
 
Net proceeds to GSI from this offering will be approximately $145 million after deducting estimated discounts, commissions and expenses. GSI expects to use the proceeds for working capital, general corporate purposes and possible acquisitions.


Under certain circumstances, the senior convertible notes will be convertible at an initial conversion rate of 33.3333 shares of GSI Commerce common stock per $1,000 principal amount of the notes, subject to adjustment. This conversion rate is equivalent to an initial conversion price of approximately $30.00 per share. This represents an approximately 23.15% premium to the last reported sale price of GSI's common stock on the NASDAQ Global Market on June 26, 2007. Upon conversion, bond holders will receive, at GSI's election, cash, shares of common stock or a combination of cash and shares of common stock.


The new series of senior convertible notes are equal in right of payment with all of GSI's unsecured, unsubordinated indebtedness, including its 3% convertible notes due 2025, and are effectively or structurally subordinated to any secured indebtedness of GSI and to any indebtedness of its subsidiaries.