CAMBRIDGE, Mass., Aug. 12, 2019 /PRNewswire/ -- Akamai
Technologies, Inc. (NASDAQ: AKAM) ("Akamai"), the intelligent edge
platform for securing and delivering digital
experiences, today announced that it proposes to offer,
subject to market factors and other conditions, $1,000,000,000 in aggregate principal amount of
convertible senior notes due 2027. The notes are to be
offered and sold to "qualified institutional buyers" pursuant to
Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"). In addition, Akamai will grant the initial
purchasers an option to purchase up to an additional $150,000,000 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 March 1
and September 1 of each year,
beginning on March 1, 2020. The
notes will mature on September 1,
2027, 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 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 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 the remaining net proceeds from the
offering for working capital and other general corporate purposes.
Additionally, Akamai may choose to expand its current business
through acquisitions of, or investments in, other businesses,
products or technologies, using cash or shares of its common
stock.
In connection with the pricing of the notes, Akamai expects to
enter 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 and/or their respective affiliates expect to
purchase shares of Akamai's common stock and/or enter into
various derivative transactions with respect to
Akamai's 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's common
stock or the notes at that time. In addition, the Option
Counterparties and/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, Morgan Stanley and BofA Merrill Lynch are acting as
joint book-running managers for the proposed offering.
This press release is being issued pursuant to Rule 135c under
the Securities Act and shall not constitute 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 concurrent stock repurchase
and 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 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
Akamai secures and delivers digital experiences for the world's
largest companies. Akamai's intelligent edge platform surrounds
everything, from the enterprise to the cloud, so customers and
their businesses can be fast, smart, and secure. Top brands
globally rely on Akamai to help them realize competitive advantage
through agile solutions that extend the power of their multi-cloud
architectures. Akamai keeps decisions, apps and experiences closer
to users than anyone — and attacks and threats far away. Akamai's
portfolio of edge security, web and mobile performance, enterprise
access and video delivery solutions is supported by unmatched
customer service, analytics and 24/7/365 monitoring.
Contacts:
Gina Sorice
Media Relations
646-320-4107
gsorice@akamai.com
| – or –|
Tom Barth
Investor Relations
617-274-7130
tbarth@akamai.com
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SOURCE Akamai Technologies, Inc.