Five9, Inc. (NASDAQ: FIVN), a leading provider of the
intelligent cloud contact center, today announced the pricing of
$650 million aggregate principal amount of 0.500% convertible
senior notes due 2025 (the “notes”) in a private placement to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933 (the “Act”). Five9 also granted the initial
purchasers of the notes a 13-day option to purchase up to an
additional $97.5 million aggregate principal amount of the
notes.
The sale of the notes to the initial purchasers is expected to
settle on May 27, 2020, subject to customary closing conditions,
and is expected to result in approximately $633.8 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 June 1 and
December 1 of each year, beginning on December 1, 2020. The notes
will mature on June 1, 2025, unless earlier converted, redeemed or
repurchased. Five9 may not redeem the notes prior to June 6, 2023;
on or after June 6, 2023 and prior to March 1, 2025, Five9 may
redeem the notes, at its option and subject to certain conditions,
as detailed below.
Five9 expects to (i) use approximately $181.0 million of the net
proceeds of the offering of the notes and (ii) issue an aggregate
of 2,723,582 shares of Five9’s common stock to repurchase or
exchange $181.0 million aggregate principal amount of its
outstanding 0.125% convertible senior notes due 2023 (the “2023
notes”) (such transactions, the “note repurchases”). Five9 also
expects to use approximately $78.7 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 would be used for working capital and other
general corporate purposes. Five9 expects that holders of the 2023
notes that sell their 2023 notes to Five9, or exchange their 2023
notes with Five9, may enter into or unwind various derivatives with
respect to Five9’s common stock and/or purchase or sell shares of
Five9’s common stock in the market to hedge their exposure in
connection with these transactions. These activities could increase
(or reduce the size of any decrease in) the market price of Five9’s
common stock or the notes. These activities could also result in
higher effective conversion prices for the notes.
The initial conversion rate for the notes is 7.4437 shares of
common stock per $1,000 principal amount of notes (which is
equivalent to an initial conversion price of approximately $134.34
per share). Prior to the close of business on the business day
immediately preceding March 1, 2025, 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 30.0% to the $103.34 per share closing price of
Five9’s common stock on the Nasdaq Global Market on May 21,
2020.
Five9 may redeem all or any portion of the notes, at its option,
on or after June 6, 2023 and prior to March 1, 2025, 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
and/or their respective affiliates (the “option 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 $206.68 per share, which represents a premium of 100%
over the last reported sale price of Five9’s common stock of
$103.34 per share on May 21, 2020, 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 option counterparties.
Five9 expects that, in connection with establishing their
initial hedges of the capped call transactions, the option
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 option 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). These activities could 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.
The notes were and will be offered only to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
under the Act. Neither the notes nor the shares of common stock
issuable upon conversion of the notes, if any, have been, nor will
be, registered under the Act or the securities laws of any other
jurisdiction and may not be offered or sold in the United States
absent registration or an applicable exemption from such
registration requirements.
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.
Forward-Looking Statements
This news release contains certain forward-looking statements,
including statements regarding our proposed offering of the notes,
the anticipated effects of the related capped call transactions and
the note repurchases, 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,
including as a result of the COVID-19 pandemic; 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 annual
report on Form 10-K and 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 intelligent contact center space, bringing the power of cloud
innovation to customers and facilitating more than six billion call
minutes 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
Genius platform is reliable, secure, compliant and scalable;
designed to create exceptional personalized customer
experiences.
Source: Five9, Inc.
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version on businesswire.com: https://www.businesswire.com/news/home/20200522005083/en/
Investor Relations Contacts:
Five9, Inc. Barry Zwarenstein Chief Financial Officer
925-201-2000 ext. 5959 IR@five9.com
The Blueshirt Group for Five9, Inc. Lisa Laukkanen 415-217-4967
Lisa@blueshirtgroup.com
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