BROOKLYN, N.Y., March 8, 2018 /PRNewswire/ -- Etsy, Inc. (Nasdaq:
ETSY), the global marketplace for unique and creative goods, today
announced the pricing of $300 million
aggregate principal amount of 0% convertible senior notes due 2023
in a private placement to qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended. Etsy
also granted the initial purchasers of the notes an option to
purchase up to an additional $45
million principal amount of notes, solely to cover
over-allotments. The sale of the notes is expected to close on
March 13, 2018, 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
March 1, 2023, unless earlier
converted or repurchased. The initial conversion rate will be
27.5691 shares of Etsy's common stock per $1,000 principal amount of notes (equivalent to
an initial conversion price of approximately $36.27 per share). The initial conversion price
of the notes represents a premium of approximately 37.5% over the
last reported sale price of Etsy's common stock on March 8, 2018. The notes will be convertible into
cash, shares of Etsy's common stock or a combination of cash and
shares of Etsy's common stock, at Etsy's election.
Etsy estimates that the net proceeds from the offering will be
approximately $291 million (or
$335 million if the initial
purchasers exercise their over-allotment option in full), after
deducting the initial purchasers' discount and estimated offering
expenses payable by Etsy. Etsy intends to use a portion of the net
proceeds from the offering to pay the cost of the capped call
transactions described below. In addition, Etsy expects to use
approximately $42 million of the net
proceeds from the offering to repurchase shares of its common stock
concurrently with the pricing of the offering in privately
negotiated transactions effected through one of the initial
purchasers or its affiliates. Etsy expects to repurchase such
shares from purchasers of the notes in the offering at a purchase
price per share equal to $26.38 (the last reported sale price
of Etsy's common stock on March 8,
2018). These repurchases could increase (or reduce the size of
any decrease in) the market price of Etsy's common stock or the
notes following the pricing of the notes, and could result in a
higher effective conversion price for the notes. Etsy intends to
use the remainder of the net proceeds from the offering for general
corporate purposes.
In connection with the pricing of the notes, Etsy entered into
capped call transactions with one or more of the initial purchasers
and/or their respective affiliates or other financial institutions
(the option counterparties). The capped call transactions are
expected generally to reduce potential dilution to Etsy's common
stock upon any conversion of notes and/or offset any cash payments
Etsy 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 initially equal to $52.76 (which represents a premium of 100% over
the last reported sale price of Etsy's common stock on March 8, 2018). If the initial purchasers
exercise their over-allotment option, Etsy expects to enter into
additional capped call transactions with the option
counterparties.
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties or their
respective affiliates expect to enter into various derivative
transactions with respect to Etsy's common stock concurrently with
or shortly after the pricing of the notes and/or purchase shares of
Etsy'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 Etsy's common stock 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 Etsy's common stock
and/or purchasing or selling Etsy's common stock or other
securities of Etsy in secondary market transactions following the
pricing of the notes and prior to the maturity of the notes (and
are likely to do so during any observation period related to a
conversion of notes). This activity could also cause or avoid an
increase or a decrease in the market price of Etsy's common stock
or the notes, which could affect a noteholder's ability to convert
its notes and, to the extent the activity occurs during any
observation period related to a conversion of notes, it could
affect the number of shares and value of the consideration that a
noteholder will receive upon conversion of its notes.
Neither the notes, nor any shares of Etsy common stock issuable
upon conversion of the notes, have been registered under the
Securities Act or any state securities laws, and unless so
registered, may not be offered or sold in the United States absent registration or an
applicable exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other
applicable securities laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any securities, nor shall it
constitute an offer, solicitation or sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction.
About Etsy
Etsy is the global marketplace for unique and creative
goods. Our mission is to keep commerce human, and we're committed
to using the power of business to strengthen communities and
empower people. We connect millions of buyers and sellers from
nearly every country in the world. Buyers come to Etsy to be
inspired and delighted by items that are crafted and curated by
creative entrepreneurs. For sellers, we offer a range of tools and
services that address key business needs.
Etsy was founded in 2005 and is headquartered
in Brooklyn, New York.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. These statements
include, but are not limited to, statements concerning the share
repurchase, the expected closing of the offering and the
anticipated use of proceeds from the offering.
Forward-looking statements include all statements that are not
historical facts. In some cases, forward-looking statements can be
identified by terms such as "anticipates," "believes," "could,"
"estimates," "expects," "intends," "may," "plans," "potential,"
"will," or similar expressions and the negatives of those words.
Forward-looking statements involve substantial risks and
uncertainties that may cause actual results to differ materially
from those that we expect. These risks and uncertainties include
market risks, trends and conditions. These and other risks are more
fully described in our filings with the Securities and Exchange
Commission, including in the section titled "Risk Factors" in our
Annual Report on Form 10-K for the year ended December 31, 2017. In light of these risks, you
should not place undue reliance on such forward-looking statements.
Forward-looking statements represent our beliefs and assumptions
only as of the date of this press release. We disclaim any
obligation to update forward-looking statements.
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SOURCE Etsy