RingCentral, Inc. Announces $600 Million Convertible Senior Notes Offering
September 09 2020 - 4:25PM
Business Wire
RingCentral, Inc. (NYSE: RNG) today announced its intention to
offer, subject to market conditions and other factors, $600 million
aggregate principal amount of Convertible Senior Notes due 2026
(the “notes”) in a private placement to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended (the “Act”). RingCentral also expects to grant the initial
purchasers of the notes an option to purchase, during a 13-day
period from, and including, the initial issuance date of the notes,
up to an additional $100 million aggregate principal amount of the
notes.
Key elements of the transaction include:
- $600 Million Convertible Senior Notes Offering with an initial
purchaser option to purchase up to $100 million additional
principal amount of the notes
- Capped Call expected to be purchased in conjunction with
Convertible Senior Notes with a premium of approximately 100% over
the last reported sale price of the common stock on the pricing
date of the offering
- Expected repurchase of a portion of the aggregate principal
amount of RingCentral’s outstanding 0% Convertible Senior Notes due
2023 issued in 2018 (the “2023 Notes”)
The notes will be senior, unsecured obligations of RingCentral.
The notes will be convertible into cash, shares of RingCentral’s
Class A common stock (“common stock”), or a combination thereof, at
RingCentral’s election. The conversion rate and other terms of the
notes are to be determined upon pricing of the offering. The notes
will also be redeemable at the option of RingCentral after a
specified date if certain conditions are met.
Capped Call to be purchased in conjunction with Convertible
Senior Notes due 2026: In connection with the pricing of the
notes, RingCentral expects to enter into capped call transactions
with one or more of the initial purchasers or other financial
institutions or their affiliates (the “counterparties”). The capped
call transactions are expected generally to reduce or offset the
potential dilution to the common stock upon any conversion of notes
with such reduction or offset, as the case may be, subject to a cap
based on the cap price. RingCentral anticipates that the cap price
of the capped call transactions will initially represent a premium
of approximately 100% over the last reported sale price of the
common stock on the pricing date of the offering. If the initial
purchasers exercise their option to purchase additional notes,
RingCentral intends to enter into additional capped call
transactions with the counterparties.
RingCentral expects that, in connection with establishing their
initial hedge of the capped call transactions, the counterparties
will enter into various derivative transactions with respect to the
common stock and/or purchase shares of the common stock
concurrently with, or shortly after, the pricing of the notes.
These activities could increase (or reduce the size of any decrease
in) the market price of the common stock or the notes at that time.
In addition, RingCentral expects that the counterparties may modify
their hedge positions by entering into or unwinding various
derivatives with respect to the common stock and/or by purchasing
or selling shares of the common stock or other securities of
RingCentral in secondary market transactions following the pricing
of the notes and prior to the maturity of the notes (and are likely
to do so on each exercise date of the capped call transactions and
in connection with any early termination event in respect of the
capped call transactions). This activity could also cause or
prevent an increase or a decrease in the market price of the common
stock or the notes, which could affect the ability of noteholders
to convert the notes and, to the extent the activity occurs during
any observation period related to a conversion of the notes, could
affect the amount and value of the consideration that noteholders
will receive upon conversion of the notes.
Repurchase of 0% Convertible Senior Notes due 2023 issued in
2018: RingCentral also intends to use a portion of the net
proceeds from this offering to repurchase a portion of the
aggregate principal amount of its outstanding 0% Convertible Senior
Notes due 2023 (the “2023 Notes”) for cash through individual
privately negotiated transactions concurrently with the offering of
the notes (collectively, the “2023 Note Repurchase”). Any 2023 Note
Repurchase and the potential related market activities by selling
holders of the 2023 Notes (such as the unwinding of certain
derivatives or the purchases of shares of common stock that
RingCentral expects to occur in connection with any 2023 Note
Repurchase), could have the effect of increasing or limiting a
decline in the market price of the common stock.
Use of Proceeds: RingCentral intends to use a portion of
the net proceeds of the offering of the notes to pay the cost of
the capped call transactions and repurchase a portion of the 2023
Notes described above. RingCentral intends to use the remainder of
the net proceeds from this offering for general corporate purposes,
which may include working capital, capital expenditures, repayment
of debt, including through the redemption of the 2023 Notes,
potential acquisitions and strategic transactions of businesses,
technologies or products. However, RingCentral has not designated
any specific uses and has no current agreements with respect to any
material acquisition or strategic transaction.
The notes will be offered to qualified institutional buyers
pursuant to Rule 144A under the Act. Neither the notes nor the
shares of common stock issuable upon conversion of the notes, if
any, have been, nor will be, registered under the Act or the
securities laws of any other jurisdiction and may not be offered or
sold in the United States absent registration or an applicable
exemption from such registration requirements. This announcement is
neither an offer to sell nor a solicitation of an offer to buy any
of these securities and shall not constitute an offer,
solicitation, or sale in any jurisdiction in which such offer,
solicitation, or sale is unlawful.
Forward-Looking Statements
This press release includes “forward-looking statements,”
including, but not limited to, whether RingCentral will be able to
consummate the offering, the final terms of the offering and the
capped call transactions, prevailing market conditions, the
anticipated use of net proceeds of the offering of the notes,
including any repurchases of the 2023 Notes pursuant to the 2023
Note Repurchase, which could change as a result of market
conditions or for other reasons, whether the capped call
transactions will become effective, whether any 2023 Note
Repurchase will close and the impact of general economic, industry
or political conditions in the United States or internationally.
Forward-looking statements are subject to known and unknown risks
and uncertainties, and are based on assumptions that may prove to
be incorrect, which could cause actual results to differ materially
from those expected or implied by the forward-looking statements.
All forward-looking statements are subject to other risks detailed
in our Quarterly Report on Form 10-Q for the quarter ended June 30,
2020, filed with the Securities and Exchange Commission, and in
other filings we make with the Securities and Exchange Commission
from time to time. All forward-looking statements in this press
release are based on information available to RingCentral as of the
date hereof, and we undertake no obligation to update these
forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200909006054/en/
Investor Relations Contact: Ryan Goodman, RingCentral
(650) 918-5356 Ryan.Goodman@ringcentral.com
Media Contact: Jyotsna Grover, RingCentral (650) 513-8712
Jyotsna.Grover@ringcentral.com
Ringcentral (NYSE:RNG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ringcentral (NYSE:RNG)
Historical Stock Chart
From Apr 2023 to Apr 2024