CAMBRIDGE, Mass., May 16, 2018 /PRNewswire/ -- Akamai Technologies,
Inc. (NASDAQ: AKAM) ("Akamai") today announced that it has priced
its private offering of $1 billion in
aggregate principal amount of its convertible senior notes due
2025. The notes will be sold to "qualified institutional buyers"
pursuant to Rule 144A under the Securities Act of 1933, as amended.
In addition, Akamai has granted the initial purchasers of the notes
an option to purchase up to an additional $150 million in aggregate principal amount of
notes on the same terms and conditions. The sale of the notes is
expected to close on May 21, 2018,
subject to customary closing conditions.
The notes will be senior unsecured obligations of Akamai and
will mature on May 1, 2025, unless
earlier repurchased or converted in accordance with their terms
prior to such date. The notes will bear interest at a rate of
0.125% per year, payable semi-annually in arrears on May 1 and November
1 of each year, beginning on November
1, 2018. The notes will be convertible prior to January 1, 2025 only upon the occurrence of
certain events and will be convertible thereafter at any time until
the close of business on the second scheduled trading day
immediately preceding the maturity date regardless of these events,
in either case, into cash, shares of Akamai's common stock or a
combination of cash and shares of Akamai's common stock at Akamai's
option. The conversion rate will initially be 10.5150 shares of
Akamai's common stock per $1,000
principal amount of notes, which is equivalent to an initial
conversion price of approximately $95.10 per share of Akamai's common stock,
subject to adjustments in certain events. The initial conversion
price represents a premium of approximately 27.5% to the
$74.59 per share closing price of
Akamai's common stock on May 16,
2018.
Akamai expects the net proceeds from this offering to be
approximately $983.5 million (or
approximately $1.13 billion if the
initial purchasers exercise their option to purchase additional
notes in full) after payment of the initial purchasers' discounts
and estimated offering expenses payable by Akamai.
Akamai intends to use $123.3
million 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 certain of the
initial purchasers of the notes or their respective affiliates (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 $46.2
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. The purchase price
per share in such transactions will equal $74.59, the closing price per share of Akamai's
common stock on May 16, 2018. The
amount of Akamai's common stock that Akamai actually repurchases
may be more or less than $46.2
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 entered 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 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. BofA Merrill Lynch is also
acting as joint book-running manager. HSBC, SMBC Nikko and TD
Securities are acting as co-managers for this 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 was and 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 offering of the notes, its use of proceeds from the
offering and the effect of the concurrent stock repurchase and
convertible note hedge and warrant transactions. There can be no
assurance that Akamai will be able to complete the 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
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.