Five9, Inc. (NASDAQ: FIVN) today announced the pricing of $225
million aggregate principal amount of 0.125% convertible senior
notes due 2023 (the “notes”) in a private placement to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the “Act”). The size of the offering was
increased from the previously announced $200 million aggregate
principal amount of notes. Five9 also granted the initial
purchasers of the notes a 30-day option to purchase up to an
additional $33.75 million aggregate principal amount of the
notes.
The sale of the notes to the initial purchasers is expected to
settle on May 8, 2018, subject to customary closing conditions, and
is expected to result in approximately $218.1 million in net
proceeds to Five9 after deducting the initial purchasers’ discount
and estimated offering expenses payable by Five9 (assuming no
exercise of the initial purchasers’ option).
The notes will be senior, unsecured obligations of Five9 and
interest will be payable semi-annually in arrears on May 1 and
November 1 of each year, beginning on November 1, 2018. The notes
will mature on May 1, 2023, unless earlier converted, redeemed or
repurchased. Five9 may not redeem the notes prior to May 5, 2021;
on or after May 5, 2021, Five9 may redeem the notes, at its option
and subject to certain conditions, as detailed below.
Five9 expects to use approximately $27.3 million of the net
proceeds of the offering of the notes to pay the cost of the capped
call transactions described below. The remainder of the net
proceeds from the offering will be used to repay outstanding
borrowings under Five9’s senior secured credit facility, which
currently has an outstanding balance of $32.6 million, and for
general corporate purposes.
The initial conversion rate for the notes is 24.4978 shares of
common stock per $1,000 principal amount of notes (which is
equivalent to an initial conversion price of approximately $40.82
per share). Prior to the close of business on the business day
immediately preceding November 1, 2022, the notes will be
convertible at the option of the noteholders only upon the
satisfaction of specified conditions and during certain periods.
Thereafter until the close of business on the second scheduled
trading day immediately preceding the maturity date, the notes will
be convertible at the option of the noteholders at any time
regardless of these conditions. Conversions of the notes will be
settled in cash, shares of Five9’s common stock or a combination
thereof, at Five9’s election. The initial conversion price
represents a premium of approximately 30% to the $31.40 per share
closing price of Five9’s common stock on the Nasdaq Global Market
on May 3, 2018.
Five9 may redeem all or any portion of the notes, at its option,
on or after May 5, 2021, at a redemption price equal to 100% of the
principal amount thereof, plus any accrued and unpaid interest if
the last reported sale price of Five9’s common stock has been at
least 130% of the conversion price then in effect for at least 20
trading days (whether or not consecutive) during any 30 consecutive
trading day period (including the last trading day of such period)
ending not more than two trading days immediately preceding the
date on which Five9 provides written notice of redemption.
Holders of notes may require Five9 to repurchase their notes
upon the occurrence of certain events that constitute a fundamental
change under the indenture governing the notes at a purchase price
equal to 100% of the principal amount thereof, plus any accrued and
unpaid interest to, but excluding, the fundamental change
repurchase date. In connection with certain corporate events or if
Five9 issues a notice of redemption, it will, under certain
circumstances, increase the conversion rate for holders who elect
to convert their notes in connection with such corporate event or
during the relevant redemption period.
In connection with the pricing of the notes, Five9 entered into
capped call transactions with one or more of the initial purchasers
or other financial institutions and/or their affiliates (the “hedge
counterparties”). The capped call transactions are expected
generally to reduce potential dilution to Five9’s common stock upon
any conversion of the notes and/or offset any cash payments Five9
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 based on the cap price. The cap price of the
capped call transactions will initially be $62.80 per share, which
represents a premium of 100% over the last reported sale price of
Five9’s common stock of $31.40 per share on May 3, 2018, and is
subject to certain adjustments under the terms of the capped call
transactions. If the initial purchasers exercise their option to
purchase additional notes, Five9 expects to enter into additional
capped call transactions with the hedge counterparties.
Five9 expects that, in connection with establishing their
initial hedges of the capped call transactions, the hedge
counterparties or their respective affiliates will purchase shares
of Five9’s common stock and/or enter into various derivative
transactions with respect to Five9’s common stock concurrently
with, or shortly after, the pricing of the notes. These activities
could increase (or reduce the size of any decrease in) the market
price of Five9’s common stock or the notes at that time.
In addition, Five9 expects that the hedge counterparties or
their respective affiliates may modify their hedge positions by
entering into or unwinding various derivative transactions with
respect to Five9’s common stock and/or by purchasing or selling
shares of Five9’s common stock or other securities of Five9 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 relating to a conversion of the
notes). This activity could also cause or avoid an increase or a
decrease in the market price of Five9’s common stock or the notes,
which could affect the ability of noteholders to convert the notes
and, to the extent the activity occurs during any observation
period related to a conversion of the notes, could affect the
number of shares and value of the consideration that noteholders
will receive upon conversion of the notes.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities and shall not constitute
an offer, solicitation, or sale in any jurisdiction in which such
offer, solicitation, or sale is unlawful. The notes and the shares
of common stock issuable upon conversion of the notes, if any, will
not be registered under the Act or any state securities laws, and
unless so registered, may not be offered or sold in the United
States except pursuant to an exemption from the registration
requirements of the Act and applicable state laws.
Forward-Looking Statements
This news release contains certain forward-looking statements,
including statements regarding our proposed offering of the notes
and the use of proceeds from the notes offering, that are based on
our current expectations and involve numerous risks and
uncertainties that may cause these forward-looking statements to be
inaccurate. Risks that may cause these forward-looking statements
to be inaccurate include, among others: (i) whether we will be able
to consummate the offering, (ii) the satisfaction of customary
closing conditions with respect to the offering of the notes, (iii)
prevailing market conditions, (iv) the anticipated use of net
proceeds of the offering of the notes which could change as a
result of market conditions or for other reasons, (v) whether the
capped call transactions will become effective, (vi) the impact of
general economic, industry or political conditions in the United
States or internationally; and (vii) the other risks detailed from
time-to-time under the caption “Risk Factors” and elsewhere in our
Securities and Exchange Commission filings and reports, including,
but not limited to, our most recent quarterly report on Form 10-Q.
Such forward-looking statements speak only as of the date hereof
and readers should not unduly rely on such statements. We undertake
no obligation to update the information contained in this press
release, including in any forward-looking statements.
About Five9
Five9 is a leading provider of cloud contact center software for
the digital enterprise, bringing the power of cloud innovation to
customers and facilitating more than three billion customer
interactions annually. Five9 provides end-to-end solutions with
omnichannel routing, analytics, WFO, and AI to increase agent
productivity and deliver tangible business results. The Five9
platform is reliable, secure, compliant, and scalable; designed to
create exceptional personalized customer experiences.
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version on businesswire.com: https://www.businesswire.com/news/home/20180503006840/en/
Investor Relations Contacts:Five9, Inc.Barry Zwarenstein,
925-201-2000 ext. 5959Chief Financial OfficerIR@five9.comorThe
Blueshirt Group for Five9, Inc.Lisa Laukkanen,
415-217-4967Lisa@blueshirtgroup.com
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