CyberArk Software Ltd. (Nasdaq: CYBR) (“CyberArk”), the global
leader in privileged access management, today announced its
intention to offer, subject to market conditions and other factors,
$500 million aggregate principal amount of Convertible Senior Notes
due 2024 (the “Notes”) in a private offering (the “Offering”) to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). In
connection with the Offering, CyberArk expects to grant the initial
purchasers of the Notes a 13-day option to purchase up to an
additional $75 million aggregate principal amount of the Notes
solely to cover over allotments.
The final terms of the Notes, including the initial conversion
price, interest rate and certain other terms, will be determined at
the time of pricing of the Offering. When issued, the Notes will be
senior, unsecured obligations of CyberArk. The Notes will bear
interest payable semi-annually in arrears and will mature on
November 15, 2024, unless earlier repurchased, redeemed or
converted in accordance with their terms prior to such date. Prior
to May 15, 2024, the Notes will be convertible at the option of
holders only upon satisfaction of certain conditions and during
certain periods. Thereafter, the Notes will be convertible at any
time until the close of business on the third scheduled trading day
immediately prior to the maturity date. The Notes will be
convertible into cash, ordinary shares of CyberArk or a combination
thereof, with the form of consideration determined at CyberArk’s
election.
In connection with the pricing of the Notes, CyberArk expects to
enter into privately negotiated capped call transactions with one
or more of the initial purchasers of the Offering and/or their
respective affiliates and/or other financial institutions (in this
capacity, the “Option Counterparties”). The capped call
transactions are expected generally to reduce the potential
dilution to the ordinary shares of CyberArk upon any conversion of
Notes and/or to offset any cash payments CyberArk is required to
make in excess of the principal amount of the converted Notes, as
the case may be, in the event that the market price of the ordinary
shares of CyberArk is greater than the strike price of the capped
call transactions, with such reduction of potential dilution and/or
offset of cash payments subject to a cap.
CyberArk has been advised that, 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 the ordinary shares
of CyberArk and/or purchase ordinary shares of CyberArk
concurrently with or shortly after the pricing of the Notes. This
activity could have the effect of increasing (or reducing the size
of any decrease in) the market price of the ordinary shares 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 the ordinary
shares and/or by purchasing or selling ordinary shares or other
securities of CyberArk in secondary market transactions following
the pricing of the Notes and prior to the maturity of the Notes
(and are likely to do so following any conversion, repurchase or
redemption of the Notes, in each case if CyberArk exercises the
relevant election under the capped call transactions). This
activity could also cause or avoid an increase or a decrease in the
market price of the ordinary shares of CyberArk or the Notes, which
could affect the ability of holders of Notes 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 ordinary shares, if any, and value of the consideration
that holders of Notes will receive upon conversion of the
Notes.
In addition, if any such capped call transaction fails to become
effective, whether or not the Offering is completed, the Option
Counterparties party thereto may unwind their hedge positions with
respect to the ordinary shares of CyberArk, which could adversely
affect the value of the ordinary shares of CyberArk and, if the
Notes have been issued, the value of the Notes.
CyberArk intends to use a portion of the net proceeds from the
Offering to pay the cost of the capped call transactions, and the
remaining net proceeds for working capital or other general
corporate purposes. CyberArk may also use a portion of the net
proceeds to acquire complementary businesses, products, services,
or technologies. However, CyberArk has not entered into any
agreements for or otherwise committed to any specific acquisitions
at this time. If the initial purchasers exercise their
over-allotment option, CyberArk expects to use a portion of the net
proceeds from the sale of the additional Notes to enter into
additional capped call transactions with the Option Counterparties
and the remaining net proceeds for general corporate purposes.
Pending these uses, CyberArk intends to invest the net proceeds in
high-quality, short-term fixed income instruments which include
corporate, financial institution, federal agency or U.S. government
obligations.
The Notes will be offered only to persons reasonably believed to
be qualified institutional buyers pursuant to Rule 144A under the
Securities Act. The offer and sale of the Notes and the ordinary
shares of CyberArk potentially issuable upon conversion of the
Notes, if any, have not been, and will not be, registered under the
Securities Act or the securities laws of any other jurisdiction,
and unless so registered, the Notes and such ordinary shares, if
any, may not be offered or sold in the United States except
pursuant to an applicable exemption from such registration
requirements.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any offer or
sale of, the Notes (or any ordinary shares of CyberArk issuable
upon conversion of the Notes) in any state or jurisdiction in which
the offer, solicitation, or sale would be unlawful prior to the
registration or qualification thereof under the securities laws of
any such state or jurisdiction.
About CyberArk Software Ltd.
CyberArk is the global leader in privileged access management, a
critical layer of IT security to protect data, infrastructure and
assets across the enterprise, in the cloud and throughout the
DevOps pipeline. CyberArk delivers the industry’s most complete
solution to reduce risk created by privileged credentials and
secrets. The company is trusted by the world’s leading
organizations, including more than 50 percent of the Fortune 500,
to protect against external attackers and malicious insiders. A
global company, CyberArk is headquartered in Petach Tikva, Israel,
with U.S. headquarters located in Newton, Mass. The company also
has offices throughout the Americas, EMEA, Asia Pacific and
Japan.
Forward-Looking Statements
This press release contains forward-looking statements,
including, among other things, about whether CyberArk will be able
to consummate the Offering, the terms of the Offering and the
capped call transactions, and expectations regarding actions of the
Option Counterparties and their respective affiliates. The words
such as “believe,” “may,” “estimate,” “continue,” “anticipate,”
“intend,” “should,” “plan,” “expect,” “predict,” “potential,” or
the negative of these terms and similar phrases that denote future
expectations or intent are intended to identify forward-looking
statements. You should not rely upon forward-looking statements as
predictions of future events.
The outcome of the events described in these forward-looking
statements is subject to known and unknown risks, uncertainties,
and other factors that may cause actual results, performance, or
achievements to differ materially, including (i) changes as a
result of market conditions or for other reasons, (ii) the risk
that the Offering will not be consummated, (iii) the risk that the
capped call transactions will not become effective, and (iv) the
impact of general economic, industry or political conditions in the
United States or internationally.
The forward-looking statements contained in this press release
are also subject to additional risks, uncertainties, and factors,
including those more fully described in CyberArk’s filings with the
Securities and Exchange Commission, including its annual report on
Form 20-F filed with the Securities and Exchange Commission on
March 14, 2019. Further information on potential risks that could
affect actual results will be included in the subsequent periodic
and current reports and other filings that CyberArk makes with the
Securities and Exchange Commission from time to time.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191112006064/en/
Investor Contact: Erica Smith CyberArk Phone:
+1-617-558-2132 ir@cyberark.com Media Contact: Liz Campbell
CyberArk Phone: +1-617-558-2191 press@cyberark.com
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