CAMBRIDGE, Mass., Aug. 13, 2019 /PRNewswire/ -- Akamai
Technologies, Inc. (NASDAQ: AKAM) ("Akamai"), the intelligent edge
platform for securing and delivering digital
experiences, today announced that it has priced its private
offering of $1,000,000,000 in
aggregate principal amount of its convertible senior notes due
2027. The notes will be sold to "qualified institutional buyers"
pursuant to Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"). In addition, Akamai has granted the initial
purchasers of the notes an option to purchase up to an additional
$150,000,000 in aggregate principal
amount of notes on the same terms and conditions. The sale of the
notes is expected to close on August 16,
2019, subject to customary closing conditions.
The notes will be senior unsecured obligations of Akamai and
will mature on September 1, 2027,
unless earlier repurchased or converted in accordance with their
terms prior to such date. The notes will bear interest at a rate of
0.375% per year, payable semi-annually in arrears on March 1 and September 1 of each year,
beginning on March 1, 2020. The notes
will be convertible prior to May 1,
2027 only upon the occurrence of certain events and will be
convertible thereafter at any time until the close of business on
the second scheduled trading day immediately preceding the maturity
date regardless of these events, in either case, into cash, shares
of Akamai's common stock or a combination of cash and shares of
Akamai's common stock at Akamai's option. The conversion rate will
initially be 8.6073 shares of Akamai's common stock per
$1,000 principal amount of notes,
which is equivalent to an initial conversion price of approximately
$116.18 per share of Akamai's common
stock, subject to adjustments in certain events. The initial
conversion price represents a premium of approximately 30.0% to the
$89.37 per share closing price of
Akamai's common stock on August 13,
2019.
Akamai expects the net proceeds from this offering to be
approximately $986.9 million (or
approximately $1,135.0 million if the
initial purchasers exercise their option to purchase additional
notes in full) after payment of the initial purchasers' discounts
and estimated offering expenses payable by Akamai.
Akamai intends to use approximately $100
million of the net proceeds from this offering to repurchase
shares of its common stock from purchasers of notes in the offering
in privately-negotiated transactions effected through one or more
of the initial purchasers or their affiliates. The purchase price
per share in such transactions will equal $89.37, the closing price per share of Akamai's
common stock on August 13, 2019.
Akamai also intends to use $110.5
million of the net proceeds to pay the cost of the
convertible note hedge transactions described below (after such
cost is partially offset by the proceeds from the sale of warrants
pursuant to the warrant transactions described below). If the
initial purchasers exercise their option to purchase the additional
notes, Akamai expects to sell additional warrants to certain of the
initial purchasers of the notes or their respective affiliates and
another financial institution (the "Option Counterparties") and use
a portion of the proceeds from the sale of the additional notes,
together with the proceeds from the additional warrant
transactions, to enter into additional convertible note hedge
transactions with the Option Counterparties. Akamai intends to use
the remaining net proceeds from the offering for working capital
and other general corporate purposes. Additionally, Akamai may
choose to expand its current business through acquisitions of, or
investments in, other businesses, products or technologies, using
cash or shares of its common stock.
In connection with the pricing of the notes, Akamai entered into
convertible note hedge transactions and warrant transactions with
the Option Counterparties. The convertible note hedge transactions
will cover, subject to anti-dilution adjustments substantially
similar to those applicable to the notes, the same number of shares
of common stock that will initially underlie the notes, including
any notes purchased by the initial purchasers pursuant to their
option to purchase additional notes. The convertible note hedge
transactions are expected generally to reduce the potential
dilution with respect to Akamai's common stock upon conversion of
the notes and/or to offset any cash payments Akamai is required to
make in excess of the principal amount of converted notes, as the
case may be. The warrants will cover, subject to customary
anti-dilution adjustments, the same number of shares of common
stock. The warrant transactions could separately have a dilutive
effect with respect to Akamai's common stock to the extent that the
market price per share of Akamai's common stock exceeds the strike
price of the warrants, unless Akamai elects, subject to certain
conditions, to settle the warrants in cash.
In connection with establishing their initial hedge of the
convertible note hedge and warrant transactions, the Option
Counterparties and/or their respective affiliates expect to
purchase shares of Akamai's common stock and/or enter into various
derivative transactions with respect to Akamai's common stock
concurrently with or shortly after the pricing of the notes. This
activity could increase (or reduce the size of any decrease in) the
market price of Akamai's common stock or the notes at that time. In
addition, the Option Counterparties and/or their respective
affiliates may modify their hedge positions (and are likely to do
so during any observation period related to a conversion of notes
or following any repurchase of notes by Akamai on any fundamental
change repurchase date or otherwise) by entering into or unwinding
various derivatives with respect to Akamai's common stock and/or
purchasing or selling common stock or other securities of Akamai in
secondary market transactions following the pricing of the notes
and prior to the maturity of the notes. This activity could also
affect the then-prevailing market price of Akamai's common stock or
the notes, which could affect the ability of holders to convert the
notes and the amount and value of the consideration that holders
receive upon conversion of the notes.
J.P. Morgan, Morgan Stanley and BofA Merrill Lynch are
acting as joint book-running managers for the proposed offering.
Barclays, Citigroup, HSBC, Mizuho Securities, MUFG, SMBC and TD
Securities are acting as co-managers for this offering.
This press release is being issued pursuant to Rule 135c under
the Securities Act and shall not constitute an offer to sell
nor a solicitation of an offer to buy any of these securities
(including the shares of Akamai's common stock, if any, issuable
upon conversion of the notes). Any offer of notes was and will be
made only by means of a private offering memorandum. The notes and
any common stock issuable upon conversion of the notes have not
been and will not be registered under the Securities Act or any
state securities laws and may not be offered or sold in
the United States absent
registration or an applicable exemption from registration
requirements.
The release contains information about future expectations,
plans and prospects of Akamai's management that constitute
forward-looking statements for purposes of the safe harbor
provisions under The Private Securities Litigation Reform Act of
1995, including statements with respect to Akamai's expectations to
complete the offering of the notes, its use of proceeds from the
offering and the effect of the concurrent stock repurchase and
convertible note hedge and warrant transactions. There can be no
assurance that Akamai will be able to complete the notes offering
on the anticipated terms, or at all. Actual results may differ
materially from those indicated by these forward-looking statements
as a result of various important factors including, but not limited
to the terms of the notes and the offering, risks and uncertainties
related to whether or not Akamai will consummate the offering, the
impact of general economic, industry, market or political
conditions and other factors that are discussed in Akamai's Annual
Report on Form 10-K, quarterly reports on Form 10-Q, and other
documents periodically filed with the SEC.
In addition, the statements in this press release represent
Akamai's expectations and beliefs as of the date of this press
release. Akamai anticipates that subsequent events and developments
may cause these expectations and beliefs to change. However, while
Akamai may elect to update these forward-looking statements at some
point in the future, it specifically disclaims any obligation to do
so. These forward-looking statements should not be relied upon as
representing Akamai's expectations or beliefs as of any date
subsequent to the date of this press release.
About Akamai
Akamai secures and delivers digital experiences for the world's
largest companies. Akamai's intelligent edge platform surrounds
everything, from the enterprise to the cloud, so customers and
their businesses can be fast, smart, and secure. Top brands
globally rely on Akamai to help them realize competitive advantage
through agile solutions that extend the power of their multi-cloud
architectures. Akamai keeps decisions, apps and experiences closer
to users than anyone — and attacks and threats far away. Akamai's
portfolio of edge security, web and mobile performance, enterprise
access and video delivery solutions is supported by unmatched
customer service, analytics and 24/7/365 monitoring.
Contacts:
Gina Sorice
Media Relations
646-320-4107
gsorice@akamai.com
Tom Barth
Investor Relations
617-274-7130
tbarth@akamai.com
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SOURCE Akamai Technologies, Inc.