CAMBRIDGE, Mass., May 15,
2018 /PRNewswire/ -- Akamai Technologies, Inc.,
(NASDAQ: AKAM) today announced that it proposes to offer, subject
to market factors and other conditions, $1
billion in aggregate principal amount of convertible senior
notes due 2025. The notes are to be offered and sold to
"qualified institutional buyers" pursuant to Rule 144A under the
Securities Act of 1933, as amended. In addition, Akamai will
grant the initial purchasers an option to purchase up to an
additional $150 million in principal
amount of notes on the same terms and conditions. Upon
conversion of the notes, holders of the notes will receive cash,
shares of Akamai's common stock or a combination of cash and shares
of Akamai's common stock at Akamai's option. Interest on the
notes will be payable semi-annually in arrears on May 1 and November
1 of each year, beginning on November
1, 2018. The notes will mature on May 1, 2025, 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.
Akamai intends to use a portion of the 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 one
or more of the initial purchasers of the notes or their respective
affiliates or other financial institutions (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 approximately $50
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. 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
$50 million.
Akamai also intends to use a portion of the net proceeds from
this offering to repay at maturity all of its $690 million outstanding aggregate principal
amount of 0.0% Convertible Senior Notes due 2019, which mature on
February 15, 2019, unless such notes
are converted prior to maturity.
Akamai intends to use the remaining net proceeds of the offering
for working capital and general corporate purposes, including
potential acquisitions and other strategic transactions.
In connection with the pricing of the notes, Akamai expects to
enter into convertible note hedge transactions and warrant
transactions with one or more of the initial purchasers of the
notes or their respective affiliates or other financial
institutions (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 or their respective affiliates expect to purchase
shares of Akamai common stock and/or enter into various derivative
transactions with respect to Akamai 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 common stock or the notes at that time. In
addition, the Option Counterparties 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 and Morgan Stanley are acting as joint book-running
managers for the proposed offering.
This press release is neither 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 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 proposed offering of the notes, its use of proceeds
from the offering and the effect of 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 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
As the world's largest and most trusted cloud delivery platform,
Akamai makes it easier for its customers to provide the best and
most secure digital experiences on any device, anytime, anywhere.
Akamai's massively distributed platform is unparalleled in scale
with over 200,000 servers across 130 countries, giving customers
superior performance and threat protection. Akamai's portfolio of
web and mobile performance, cloud security, enterprise access, and
video delivery solutions are supported by exceptional customer
service and 24/7 monitoring.
Contacts:
|
Jeanne Trogan
Media Relations
617-806-8048
jtrogan@akamai.com
|
– or –
|
Tom Barth
Investor Relations
617-274-7130
tbarth@akamai.com
|
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SOURCE Akamai Technologies, Inc.