CyberArk Software Ltd. (Nasdaq: CYBR) (“CyberArk”), the global
leader in privileged access management, today announced the pricing
of $500 million aggregate principal amount of 0% Convertible Senior
Notes due 2024 (the “Notes”) in a private offering (the “Offering”)
to qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). In
connection with the Offering, CyberArk has granted the initial
purchasers of the Notes a 13 day option to purchase up to an
additional $75 million aggregate principal amount of the Notes
solely to cover over-allotments. The sale of the Notes to the
initial purchasers is expected to settle on November 18, 2019,
subject to customary closing conditions.
The Notes will not bear regular interest, and the principal
amount of the Notes will not accrete. The Notes will mature on
November 15, 2024, unless earlier repurchased, redeemed or
converted in accordance with their terms prior to such date.
CyberArk may redeem for cash (1) all of the Notes at any time
prior to the 42nd scheduled trading day immediately preceding the
maturity date if certain tax-related events occur and (2) all or
any portion of the Notes, on or after November 15, 2022, and prior
to the 42nd scheduled trading day immediately preceding the
maturity date, at its option at any time and from time to time, if
the last reported sale price of CyberArk’s ordinary shares exceeds
130% of the conversion price for a specified period of time. The
redemption price will equal the principal amount of the notes to be
redeemed, plus accrued and unpaid special interest, if any, to, but
excluding, the redemption date.
Holders of the Notes will have the right to require CyberArk to
repurchase all or a portion of their Notes upon the occurrence of a
fundamental change (as defined in the indenture governing the
Notes) at a cash purchase price of 100% of their principal amount
plus accrued and unpaid special interest, if any, to, but
excluding, the fundamental change repurchase date. In connection
with certain corporate events or following CyberArk’s delivery of a
notice of redemption, CyberArk will, under certain circumstances,
increase the conversion rate for holders who elect to convert their
Notes in connection with such corporate event or notice of
redemption, as the case may be.
The Notes will be convertible based on an initial conversion
rate of 6.3478 ordinary shares of CyberArk per $1,000 principal
amount of Notes (equivalent to an initial conversion price of
approximately $157.53 per share, which represents a conversion
premium of approximately 37.5% to the last reported sale price of
CyberArk’s ordinary shares on The Nasdaq Global Select Market on
November 13, 2019). Prior to the close of business on the business
day immediately preceding May 15, 2024, the Notes will be
convertible at the option of the holders of the Notes only upon the
satisfaction of specified conditions and during certain periods. On
or after May 15, 2024 until the close of business on the third
scheduled trading day preceding the maturity date, the Notes will
be convertible at the option of the holders of Notes at any time
regardless of these conditions. Conversions of the Notes will be
settled in cash, ordinary shares of CyberArk or a combination
thereof, at CyberArk’s election.
When issued, the Notes will be CyberArk’s senior unsecured
obligations and will rank senior in right of payment to any of
CyberArk’s unsecured indebtedness that is expressly subordinated in
right of payment to the Notes; equal in right of payment to any of
CyberArk’s unsecured indebtedness that is not so subordinated;
effectively junior in right of payment to any of CyberArk’s secured
indebtedness to the extent of the value of the assets securing such
indebtedness; and structurally junior to all indebtedness and other
liabilities (including trade payables) of CyberArk’s
subsidiaries.
In connection with the pricing of the Notes, CyberArk entered
into privately negotiated capped call transactions with certain of
the initial purchasers of the Offering and/or their respective
affiliates and/or other financial institutions (in this capacity,
the “Option Counterparties”). The capped call transactions are
expected generally to reduce the potential dilution to the ordinary
shares of CyberArk upon any conversion of Notes and/or to offset
any cash payments CyberArk is required to make in excess of the
principal amount of converted Notes, as the case may be, in the
event the market price of the ordinary shares of CyberArk is
greater than the strike price of the capped call transactions, with
such reduction of potential dilution and/or offset subject to a
cap. The cap price of the capped call transactions will initially
be $229.14 per share, which represents a premium of 100% over the
last reported sale price of the ordinary shares of CyberArk of
$114.57 per share on November 13, 2019, and is subject to certain
adjustments under the terms of the capped call transactions.
CyberArk has been advised that, in connection with establishing
their initial hedges of the capped call transactions, the Option
Counterparties or their respective affiliates expect to enter into
various derivative transactions and/or purchase ordinary shares of
CyberArk with respect to the ordinary shares of CyberArk
concurrently with or shortly after the pricing of the Notes. This
activity could have the effect of increasing (or reducing the size
of any decrease in) the market price of the ordinary shares of
CyberArk or the Notes at that time. In addition, the Option
Counterparties or their respective affiliates may modify their
hedge positions by entering into or unwinding various derivatives
with respect to the ordinary shares of CyberArk and/or by
purchasing or selling ordinary shares or other securities of
CyberArk in secondary market transactions from time to time prior
to the maturity of the Notes (and are likely to do so following any
conversion of the Notes or repurchase of the Notes by CyberArk on
any fundamental change repurchase date, any redemption date or
otherwise, in each case, if CyberArk exercises the relevant
election under the capped call transactions). This activity could
also cause or avoid an increase or a decrease in the market price
of the ordinary shares of CyberArk or the Notes, which could affect
the ability of holders of Notes 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 number of ordinary
shares of CyberArk, if any, and value of the consideration that
holders of Notes will receive upon conversion of the Notes.
In addition, if any such capped call transactions fail to become
effective, whether or not the Offering is completed, the Option
Counterparties party thereto or their respective affiliates may
unwind their hedge positions with respect to the ordinary shares of
CyberArk, which could adversely affect the value of the ordinary
shares of CyberArk and, if the Notes have been issued, the value of
the Notes.
CyberArk estimates that the net proceeds from the Offering will
be approximately $487 million (or $560 million if the initial
purchasers exercise their over-allotment option in full), after
deducting initial purchasers’ discounts and estimated offering
expenses payable by CyberArk. CyberArk intends to use approximately
$46.7 million of the net proceeds from the Offering to pay the cost
of the capped call transactions and to use the remaining net
proceeds for working capital or other general corporate purposes.
CyberArk may also use a portion of the net proceeds to acquire
complementary businesses, products, services or technologies.
However, CyberArk has not entered into any agreements for or
otherwise committed to any specific acquisitions at this time. If
the initial purchasers exercise their over-allotment option,
CyberArk expects to use a portion of the net proceeds from the sale
of the additional Notes to enter into additional capped call
transactions with the Option Counterparties and for general
corporate purposes as described above. Pending these uses, CyberArk
intends to invest the net proceeds in high-quality, short-term
fixed income instruments which include corporate, financial
institution, federal agency or U.S. government obligations.
The Notes were offered only to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act. The offer and sale of the Notes and the ordinary
shares of CyberArk potentially issuable upon conversion of the
Notes, if any, have not been, and will not be, registered under the
Securities Act or the securities laws of any other jurisdiction,
and unless so registered, the Notes and such ordinary shares, if
any, may not be offered or sold in the United States except
pursuant to an applicable exemption from such registration
requirements.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any offer or
sale of, the Notes (or any ordinary shares of CyberArk issuable
upon conversion of the Notes) in any state or jurisdiction in which
the offer, solicitation, or sale would be unlawful prior to the
registration or qualification thereof under the securities laws of
any such state or jurisdiction.
About CyberArk Software Ltd.
CyberArk is the global leader in privileged access management, a
critical layer of IT security to protect data, infrastructure and
assets across the enterprise, in the cloud and throughout the
DevOps pipeline. CyberArk delivers the industry’s most complete
solution to reduce risk created by privileged credentials and
secrets. The company is trusted by the world’s leading
organizations, including more than 50 percent of the Fortune 500,
to protect against external attackers and malicious insiders. A
global company, CyberArk is headquartered in Petach Tikva, Israel,
with U.S. headquarters located in Newton, Mass. The company also
has offices throughout the Americas, EMEA, Asia Pacific and
Japan.
Forward-Looking Statements
This press release contains forward-looking statements,
including, among other things, about whether CyberArk will be able
to consummate the Offering, the terms of the Offering and the
capped call transactions, expectations regarding actions of the
Option Counterparties and their respective affiliates and the
satisfaction of customary closing conditions with respect to the
Offering. The words such as “believe,” “may,” “estimate,”
“continue,” “anticipate,” “intend,” “should,” “plan,” “expect,”
“predict,” “potential,” or the negative of these terms and similar
phrases that denote future expectations or intent are intended to
identify forward-looking statements. You should not rely upon
forward-looking statements as predictions of future events.
The outcome of the events described in these forward-looking
statements is subject to known and unknown risks, uncertainties,
and other factors that may cause actual results, performance, or
achievements to differ materially, including (i) changes as a
result of market conditions or for other reasons, (ii) the risk
that the Offering will not be consummated, (iii) the risk that the
capped call transactions will not become effective, and (iv) the
impact of general economic, industry or political conditions in the
United States or internationally.
The forward-looking statements contained in this press release
are also subject to additional risks, uncertainties, and factors,
including those more fully described in CyberArk’s filings with the
Securities and Exchange Commission, including its annual report on
Form 20-F filed with the Securities and Exchange Commission on
March 14, 2019. Further information on potential risks that could
affect actual results will be included in the subsequent periodic
and current reports and other filings that CyberArk makes with the
Securities and Exchange Commission from time to time.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191114005282/en/
Investor Contact: Erica Smith CyberArk Phone:
+1-617-558-2132 ir@cyberark.com
Media Contact: Liz Campbell CyberArk Phone:
+1-617-558-2191 press@cyberark.com
CyberArk Software (NASDAQ:CYBR)
Historical Stock Chart
From Mar 2024 to Apr 2024
CyberArk Software (NASDAQ:CYBR)
Historical Stock Chart
From Apr 2023 to Apr 2024