CAMBRIDGE, Mass., May 13, 2025
/PRNewswire/ -- Akamai Technologies, Inc. (NASDAQ: AKAM)
("Akamai"), the cybersecurity and cloud computing company that
powers and protects business online, today announced that it
proposes to offer, subject to market factors and other conditions,
$1.35 billion in aggregate principal
amount of convertible senior notes due 2033. The notes are to be
sold only to persons reasonably believed to be "qualified
institutional buyers" pursuant to Rule 144A under the Securities
Act of 1933, as amended (the "Securities Act"). In addition, Akamai
will grant the initial purchasers of the notes an option to
purchase up to an additional $202.5
million in aggregate principal amount of notes on the same
terms and conditions. Upon conversion, Akamai will pay cash up to
the aggregate principal amount of the notes to be converted and pay
or deliver, as the case may be, cash, shares of Akamai's common
stock or a combination of cash and shares of common stock, at
Akamai's election, in respect of the remainder, if any, of its
conversion obligation in excess of the aggregate principal amount
of the notes being converted. Interest on the notes will be payable
semi-annually in arrears on May 15
and November 15 of each year,
beginning on November 15, 2025. The
notes will mature on May 15, 2033,
unless earlier repurchased or converted in accordance with their
terms prior to such date. The interest rate, initial conversion
rate, offering price and other terms will be determined at the time
of pricing the offering. The notes will be senior unsecured
obligations of Akamai.
Subject to costs and expenses related to the convertible note
hedge and warrant transactions and share repurchases described
below, Akamai intends to use the remaining net proceeds from the
offering to repay approximately $250.0
million in borrowings outstanding under its five-year senior
unsecured revolving credit facility and repay at maturity a portion
of its $1.15 billion outstanding
aggregate principal amount of 0.375% Convertible Senior Notes due
2027, which mature on September 1,
2027, and/or to pay cash amounts due upon any earlier
conversion thereof.
Akamai intends to use a portion of the net proceeds from this
offering to pay the cost of the convertible note hedge transactions
described below (after such cost is partially offset by the
proceeds to Akamai from the sale of warrants pursuant to the
warrant transactions described below). If the initial purchasers
exercise their option to purchase additional notes, Akamai expects
to sell additional warrants to one or more of the initial
purchasers of the notes and/or their respective affiliates and/or
other financial institutions (the "Option Counterparties") and use
a portion of the net proceeds from the sale of such additional
notes, together with the proceeds from the additional warrant
transactions, to enter into additional convertible note hedge
transactions with the Option Counterparties.
Akamai also intends to use approximately $275.0 million of the net proceeds from the
offering to repurchase shares of its common stock from purchasers
of the notes in the offering in privately-negotiated transactions
effected through one or more of the initial purchasers or their
affiliates. Akamai expects the purchase price per share in such
transactions to equal the closing price per share of Akamai's
common stock on the date of pricing of the offering. The amount of
Akamai's common stock that Akamai actually repurchases may be more
or less than $275.0 million.
Holders may require Akamai to repurchase for cash all or any
portion of their notes on May 15,
2031 (the "optional repurchase date"), if the last reported
sale price of Akamai's common stock on the trading day immediately
preceding the business day immediately preceding the optional
repurchase date is less than the conversion price, at an optional
repurchase price equal to 100% of the principal amount of the notes
to be repurchased, plus any accrued and unpaid interest to, but
excluding, the optional repurchase date. In addition, if Akamai
undergoes a fundamental change prior to the maturity date of the
notes, subject to certain conditions and limited exceptions,
holders may require Akamai to repurchase for cash all or any
portion of their notes at a fundamental change repurchase price
equal to 100% of the principal amount of the notes to be
repurchased, plus any accrued and unpaid interest to, but
excluding, the fundamental change repurchase date.
In connection with the pricing of the notes, Akamai expects to
enter 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 Akamai's 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 Akamai's 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
by entering into or unwinding various derivatives with respect to
Akamai's common stock and/or purchasing or selling Akamai's 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 (and are likely to do so during any
observation period related to a conversion of the notes or
following any repurchase of the notes by Akamai). This activity
could also cause or avoid an increase or a decrease in the market
price of Akamai's common stock or the notes, which could affect the
ability of holders to convert the notes and, to the extent the
activity occurs during any observation period related to a
conversion of the notes, it could affect the amount and value of
the consideration that holders receive upon conversion of the
notes.
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 will be made only by
means of a private offering memorandum. The notes and the common
stock issuable upon conversion of the notes, if any, 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 proposed offering of the notes, its use of proceeds
from the offering and the effect of the concurrent stock repurchase
and the convertible note hedge and warrant transactions. There can
be no assurance that Akamai will be able to complete the proposed
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 is the cybersecurity and cloud computing company that
powers and protects business online. Our market-leading security
solutions, superior threat intelligence, and global operations team
provide defense-in-depth to safeguard enterprise data and
applications everywhere. Akamai's full-stack cloud computing
solutions deliver performance and affordability on the world's most
distributed platform. Global enterprises trust Akamai to provide
the industry-leading reliability, scale, and expertise they need to
grow their business with confidence.
Contacts:
Christine
Simeone
Media Relations
Akamai Technologies
AkamaiPR@akamai.com
Mark Stoutenberg
Investor Relations
Akamai Technologies
mstouten@akamai.com
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SOURCE Akamai Technologies, Inc.
