Fiverr International Ltd. (NYSE: FVRR) (“Fiverr”) today
announced the pricing of $400 million aggregate principal amount of
0% Convertible Senior Notes due 2025 (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, Fiverr has
granted the initial purchasers of the Notes an option to purchase,
within a 13-day period beginning on, and including, the date on
which the Notes are first issued, up to an additional $60 million
aggregate principal amount of the Notes. The sale of the Notes to
the initial purchasers is expected to settle on October 13, 2020,
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 1, 2025, unless earlier repurchased, redeemed or converted
in accordance with their terms. The Notes will be convertible based
on an initial conversion rate of 4.6823 ordinary shares of Fiverr
per $1,000 principal amount of Notes (equivalent to an initial
conversion price of approximately $213.57 per share, which
represents a conversion premium of approximately 40% to the last
reported sale price of Fiverr’s ordinary shares on the New York
Stock Exchange on October 7, 2020). Prior to the close of business
on the business day immediately preceding May 1, 2025, 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. Thereafter, the Notes will be convertible at the option of
the holders of Notes at any time until the close of business on the
third scheduled trading day immediately preceding the maturity date
regardless of these conditions. Conversions of the Notes will be
settled in cash, ordinary shares of Fiverr or a combination
thereof, at Fiverr’s election.
Fiverr may not redeem the Notes prior to November 5, 2023,
except in the event of certain tax law changes. On or after
November 5, 2023, Fiverr may redeem, for cash, all or part of the
Notes if the last reported sale price of its ordinary shares has
been at least 130% of the conversion price then in effect for at
least 20 trading days (whether or not consecutive) during any 30
consecutive trading day period (including the last trading day of
such period) ending on, and including, the trading day immediately
preceding the date on which Fiverr provides notice of the
redemption at a redemption price equal to 100% of 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 Fiverr 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 repurchase price equal to 100% of the principal
amount of the Notes to be repurchased, plus any accrued and unpaid
special interest, if any, to, but excluding, the fundamental change
repurchase date. In connection with certain corporate events or
following Fiverr’s delivery of a notice of redemption, Fiverr will,
under certain circumstances, increase the conversion rate for a
holder who elects to convert its Notes in connection with such
corporate event or to convert its Notes called for redemption in
connection with such notice of redemption, as the case may be.
When issued, the Notes will be Fiverr’s senior unsecured
obligations and will rank senior in right of payment to any of
Fiverr’s unsecured indebtedness that is expressly subordinated in
right of payment to the Notes; equal in right of payment to any of
Fiverr’s unsecured indebtedness that is not so subordinated;
effectively junior in right of payment to any of Fiverr’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 Fiverr’s
subsidiaries.
In connection with the pricing of the Notes, Fiverr has entered
into privately negotiated capped call transactions with certain of
the initial purchasers of the Notes or their respective affiliates
and other financial institutions (in this capacity, the “Option
Counterparties”). The capped call transactions are expected
generally to reduce the potential dilution to the holders of
ordinary shares of Fiverr upon any conversion of Notes and/or to
offset any cash payments Fiverr is required to make in excess of
the principal amount of converted Notes, as the case may be, with
such reduction and/or offset subject to a cap. The cap price of the
capped call transactions will initially be $305.10 per share, which
represents a premium of 100% over the last reported sale price of
the ordinary shares of Fiverr of $152.55 per share on October 7,
2020, and is subject to certain adjustments under the terms of the
capped call transactions. If the initial purchasers exercise their
option to purchase additional Notes, Fiverr expects to enter into
additional capped call transactions with the Option
Counterparties.
Fiverr 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 purchase
ordinary shares of Fiverr and/or enter into various derivative
transactions with respect to the ordinary shares of Fiverr
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 the ordinary shares of Fiverr 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 Fiverr and/or by purchasing or selling ordinary shares or other
securities of Fiverr in secondary market transactions from time to
time prior to the maturity of the Notes (and are likely to do so
following any conversion, repurchase, or redemption of the Notes,
to the extent Fiverr 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 Fiverr 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 Fiverr, 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
Fiverr, which could adversely affect the value of the ordinary
shares of Fiverr and, if the Notes have been issued, the value of
the Notes.
Fiverr estimates that the net proceeds from the Offering will be
approximately $388.8 million (or $447.3 million if the initial
purchasers exercise their option to purchase additional Notes in
full), after deducting fees and estimated offering expenses payable
by Fiverr. Fiverr intends to use $37.6 million of the net proceeds
from the Offering to pay the cost of the capped call transactions.
Fiverr intends to use any remaining net proceeds from the Offering
for working capital or other general corporate purposes. If the
initial purchasers exercise their option to purchase additional
Notes, Fiverr 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 the remaining net
proceeds for general corporate purposes.
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 Fiverr potentially issuable upon conversion of the Notes,
if any, have not been, and will not be, registered under the
Securities Act, any state securities laws or the securities laws of
any other jurisdiction, and unless so registered, the Notes and
such 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 Fiverr 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 Fiverr
Fiverr’s mission is to change how the world works together. For
over 10 years, the Fiverr platform has been at the forefront of the
future of work connecting businesses of all sizes with skilled
freelancers offering digital services in more than 400 categories,
across 8 verticals including graphic design, digital marketing,
programming, video and animation. In the twelve months ended June
30, 2020, 2.8 million customers bought a wide range of services
from freelancers across more than 160 countries.
Forward-Looking Statements
This press release contains forward-looking statements, within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties.
Such forward-looking statements may include, among other things,
expectations regarding actions of the Option Counterparties and
their respective affiliates; the satisfaction of customary closing
conditions with respect to the Offering and the anticipated use of
the net proceeds of the Offering, and may be identified by words
like “anticipate,” “assume,” “believe,” “aim,” “forecast,”
“indication,” “continue,” “could,” “estimate,” “expect,” “intend,”
“may,” “plan,” “potential,” “predict,” “project,” “outlook,”
“future,” “will,” “seek” and similar terms or phrases. The
forward-looking statements contained in this announcement are based
on management’s current expectations, which are subject to
uncertainty, risks and changes in circumstances that are difficult
to predict and many of which are outside of our control.
Important factors that could cause actual outcomes to differ
materially from those indicated in the forward-looking statements
include, among others, the uncertainty surrounding the duration and
severity of COVID-19 and its effects on our business; the risk that
the Offering will not be consummated; and changes in global,
national, regional or local economic, business, competitive,
market, regulatory and other factors discussed under the heading
“Risk Factors” in the Company’s 2019 annual report on Form 20-F
filed with the Securities and Exchange Commission on March 31,
2020. Any forward-looking statement made by Fiverr in this press
release speaks only as of the date hereof. Factors or events that
could cause Fiverr’s actual results to differ may emerge from time
to time, and it is not possible for Fiverr to predict all of them.
Fiverr undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future developments or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201008005546/en/
Investor Relations: Jinjin Qian investors@fiverr.com
Press: Siobhan Aalders press@fiverr.com
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