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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_________________________
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
February
28, 2024 (February
27, 2024)
Date of Report
(Date of earliest event reported)
_________________________
Progress
Software Corporation
PROGRESS SOFTWARE CORP /MA
(Exact name of
registrant as specified in its charter)
Delaware |
0-19417 |
04-2746201 |
(State or other jurisdiction
of incorporation or organization) |
(Commission file number) |
(I.R.S. Employer Identification
No.) |
15 Wayside
Road, Suite 400
Burlington,
Massachusetts 01803
(Address of principal
executive offices, including zip code)
(781) 280-4000
(Registrant’s
telephone number, including area code)
Not
applicable
(Former
name or former address, if changed since last report)
Check the appropriate box below if
the Form 8−K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
☐ |
Written communications pursuant to Rule
425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
Trading
Symbol(s) |
Name
of each exchange on which registered |
Common
Stock, $0.01 par value per share |
PRGS |
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
On February 27, 2024, Progress Software Corporation (the “Company”)
issued a press release announcing that the Company had priced a private offering (the “Notes Offering”) of $400 million aggregate
principal amount of convertible senior notes due 2030 (the “Notes”) to persons reasonably believed to be qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The aggregate principal amount of the Notes Offering was increased
from the previously announced offering size of $350 million. A copy of the press release is being furnished as Exhibit 99.1 to this Current
Report and is incorporated herein by reference.
Item 9.01 | Financial Statements
and Exhibits. |
(d) Exhibits.
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed by the undersigned
hereunto duly authorized.
|
|
|
|
Progress Software
Corporation |
Date: February
28, 2024 |
|
|
|
By: |
/s/
Yufan Stephanie Wang |
|
Name: |
Yufan Stephanie Wang |
|
Title: |
Chief Legal Officer |
Exhibit 99.1
Progress Software Announces Upsize and Pricing
of Convertible Senior Notes Offering
BURLINGTON, Mass., February 27, 2024 –
Progress Software Corporation (NASDAQ: PRGS) (“Progress”) today announced the pricing of its private offering of $400.0 million
aggregate principal amount of 3.50% Convertible Senior Notes due 2030 (the “Notes”) to persons reasonably believed to be qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Progress also
granted the initial purchasers of the Notes an option to purchase up to an additional $50.0 million aggregate principal amount of the
Notes, for settlement within a 13-day period beginning on, and including, the first date on which the Notes are issued, solely to cover
overallotments. The aggregate principal amount of the offering was increased from the previously announced offering size of $350.0 million
(or $402.5 million if the initial purchasers exercise their option to purchase additional notes in full). The offering of the Notes is
expected to close on March 1, 2024, subject to customary closing conditions.
The Notes will be Progress’ senior unsecured
obligations and will mature on March 1, 2030, unless earlier converted, redeemed or repurchased. The Notes will bear interest at a rate
of 3.50% per year, payable semi-annually in arrears on March 1 and September 1, of each year, beginning on September 1, 2024. Before November
1, 2029, Noteholders will have the right to convert their Notes only upon the occurrence of certain
events. From and after November 1, 2029, Noteholders may convert their Notes at any
time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Progress
will satisfy its conversion obligations by paying cash up to the aggregate principal amount of Notes to be converted and pay or deliver,
as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election, in respect
of the remainder. The initial conversion rate is 14.7622 shares
of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $67.74
per share of common stock. The initial conversion price represents a premium of approximately 27.50%
over the last reported sale price of $53.13 per share of Progress’ common stock
on February 27, 2024. The conversion rate and conversion price will be subject to adjustment
upon the occurrence of certain events. In addition, upon certain corporate events or upon a notice of redemption (as described below),
Progress will, under certain circumstances, increase the conversion rate for Noteholders who convert Notes in connection with such a corporate
event or notice of redemption.
The Notes will not be redeemable before March
5, 2027. The Notes will be redeemable, in whole or in part, for cash at Progress’ option at any time, and from time to time, on
or after March 5, 2027 and on or before the 60th scheduled trading day immediately before the maturity date, but only if the last
reported sale price per share of Progress’ common stock exceeds 130% of the conversion price for a specified period of time. The
redemption price will be equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding,
the redemption date.
If a “fundamental change” (as will
be defined in the indenture for the Notes) occurs, then, subject to a limited exception, Noteholders may require Progress to repurchase
their Notes for cash. The repurchase price will be equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid
interest to, but excluding, the applicable repurchase date.
Progress estimates that
the net proceeds from the offering will be approximately $389.3 million (or $438.1 million if the initial purchasers exercise their option
to purchase additional notes in full) after deducting the initial purchasers’ discount and commissions and estimated offering expenses
payable by it.
Progress intends to use the net proceeds from
the offering (i) to repay amounts outstanding under its term loan credit facility, (ii) to fund the approximate $37.5 million cost of
entering into the capped call transactions described below, (iii) to repurchase approximately 470,544 shares of its common stock, using
approximately $25.0 million of the net proceeds from the offering, pursuant to its existing share repurchase program concurrently with
the pricing of the offering in privately negotiated transactions effected through one or more of the initial purchasers or their affiliates,
at a price per share equal to $53.13, the last reported sale price per share of Progress’ common stock on February 27, 2024 and
(iv) for general corporate purposes, which may include repayment of other indebtedness.
In connection with the pricing of the Notes,
Progress entered into privately negotiated capped call transactions with one or more of the initial purchasers and/or their respective
affiliates and/or other financial institutions (the “option counterparties”). The capped call transactions will cover, subject
to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of shares of common stock initially underlying
the Notes. If the initial purchasers exercise their option to purchase additional Notes, then Progress expects to enter into additional
capped call transactions with the option counterparties. The capped call transactions are expected generally to reduce the potential dilution
to Progress’ common stock upon any conversion of the Notes and/or offset any potential cash payments Progress 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. The cap
price of the capped call transactions will initially be approximately $92.98, which represents a premium of approximately 75.00% over
the last reported sale price of Progress’ common stock of $53.13 per share on February 27, 2024, and is subject to certain adjustments
under the terms of the capped call transactions.
In connection with establishing their initial
hedges of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of Progress’
common stock and/or enter into various derivative transactions with respect to Progress’ 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 Progress’
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 Progress’ common stock and/or purchasing or selling Progress’
common stock or other securities issued by Progress in secondary market transactions following the pricing of the Notes and prior to the
maturity of the Notes (and (x) are likely to do so during any observation period related to a conversion of the Notes, following any redemption
of the Notes by Progress or following any repurchase of the Notes by Progress in connection with any fundamental change and (y) are likely
to do so following any repurchase of the Notes by Progress other than in connection with any such redemption or any such fundamental change
if Progress elects to unwind a corresponding portion of the capped call transactions in connection with such repurchase). This activity
could also cause or avoid an increase or a decrease in the market price of Progress’ common stock or the Notes, which could affect
a Noteholder’s ability to convert the Notes and, to the extent the activity occurs during any observation period related to a conversion
of the Notes, it could affect the number of shares of Progress’ common stock and value of the consideration that a Noteholder will
receive upon conversion of the Notes.
In addition, if any such capped call transaction
fails to become effective, whether or not the offering of the Notes is completed, the option counterparty party thereto may unwind its
hedge positions with respect to Progress’ common stock, which could adversely affect the value of Progress’ common stock and,
if the Notes have been issued, the value of the Notes.
The concurrent repurchases of shares of Progress’
common stock described above may have resulted in the common stock trading at prices that are higher than would be the case in the absence
of these repurchases, which may have resulted in a higher initial conversion price for the Notes Progress is offering.
The Notes will be offered and sold only to persons
reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Notes and any shares of Progress’
common stock issuable upon conversion of the Notes have not been registered under the Securities Act, or any state securities law, and
the Notes and any such shares may not be offered or sold in the United States or to any U.S. persons absent registration under, or pursuant
to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws.
This press release does not constitute an offer
to sell or a solicitation of an offer to buy the Notes or any shares of Progress’ common stock issuable upon conversion of the Notes,
nor shall there be any offer, solicitation or sale of any Notes or any such shares of Progress’ common stock issuable upon conversion
of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Progress
Progress provides enterprise software products for the development, deployment
and management of high-impact business applications. With Progress, businesses can automate and optimize the process by which applications
are developed, deployed and managed, making critical data and content more accessible and secure and technology teams more productive.
Progress and Progress Software are trademarks or registered trademarks
of Progress Software Corporation and/or its subsidiaries or affiliates in the U.S. and other countries. Any other names contained herein
may be trademarks of their respective owners.
Forward-Looking
Statements
This press release contains statements that are “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Progress has identified some of these forward-looking statements with words like “believes,” “expects,”
“may,” “could,” “would,” “might,” “will,” “should,” “seeks,”
“intends,” “plans,” “estimates,” “targets,” or “anticipates,” or similar expressions
which concern our strategy, plans, projections or intentions. Forward looking statements in this press release include, but are not limited
to, statements regarding the completion, timing and size of the proposed offering, the intended use of proceeds, the terms of the Notes
being offered, the anticipated terms of, and the effects of entering into, the capped call transactions and the actions of the option
counterparties and their respective affiliates. By their nature, forward-looking statements: speak only as of the date they are made;
are not statements of historical fact or guarantees of future performance; and are subject to risks, uncertainties, assumptions, or changes
in circumstances that are difficult to predict or quantify. Our expectations, beliefs, and projections are expressed in good faith and
we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and
projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking
statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described
under the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended November 30, 2023. Among those
risks and uncertainties are market conditions, including market interest rates, the trading price and volatility of Progress’ common
stock and risks relating to Progress’ business. Progress may not consummate the proposed offering described in this press release,
and, if the proposed offering is consummated, Progress cannot provide any assurances regarding the final terms of the offering or the
Notes or its ability to effectively apply the net proceeds as described above. Except as required by law, Progress has no obligation to
update any of these forward-looking statements to conform these statements to actual results or revised expectations, which speak only
as of the date of this press release.
Investor Contact: |
|
Press Contact: |
Michael Micciche |
|
Erica McShane |
Progress Software |
|
Progress Software |
+1 781 850 8450 |
|
+1 781 280 4000 |
Investor-Relations@progress.com |
|
PR@progress.com |
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