Nutanix, Inc. ("Nutanix") (NASDAQ: NTNX) today announced the
pricing of its offering of $500 million aggregate principal amount
of 0% 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 $400
million offering size. Nutanix has granted the initial purchasers
of the notes an option to purchase up to an additional $75 million
aggregate principal amount of the notes within a 13-day period
from, and including, the initial issuance date of the notes. The
sale of the notes to the initial purchasers is expected to settle
on January 22, 2018, subject to satisfaction of customary closing
conditions, and is expected to result in approximately $489.9
million in net proceeds to Nutanix after deducting the initial
purchasers' discount and estimated offering expenses payable by
Nutanix (assuming no exercise of the initial purchasers'
option).
The notes will be senior, unsecured obligations of Nutanix. The
notes will not bear interest and the principal amount of the notes
will not accrete. The notes will mature on January 15, 2023, unless
earlier repurchased or converted.
Nutanix intends to use a portion of the net proceeds of the
offering to pay the cost of the convertible note hedge transactions
described below (after such cost is partially offset by the
proceeds to Nutanix of the warrant transactions described below)
and to use the remaining proceeds of the offering for general
corporate purposes, including working capital, capital expenditures
and potential acquisitions. From time to time, we evaluate
potential acquisitions of businesses, technologies or products.
Currently, however, we do not have any definitive agreements with
respect to any pending material acquisitions.
The initial conversion rate for the notes is 20.4705 shares of
Nutanix's Class A common stock (the "common stock") per $1,000
principal amount of notes (which is equivalent to an initial
conversion price of approximately $48.85 per share) and is subject
to adjustment upon the occurrence of certain events. Prior to the
close of business on the business day immediately preceding October
15, 2022, the notes will be convertible at the option of the
noteholders upon satisfaction of specified conditions and during
certain periods. On or after such date, 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 common stock or a
combination of cash and shares of common stock, at Nutanix's
election. The initial conversion price represents a premium of
approximately 33% over the last reported sale price of Nutanix's
Class A common stock on January 17, 2018 of $36.73 per share on The
Nasdaq Global Select Market.
Holders of notes may require Nutanix 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 special interest to, but excluding, the date of repurchase.
In connection with certain corporate events, Nutanix will, under
certain circumstances, increase the conversion rate for holders who
elect to convert their notes in connection with such corporate
event.
In connection with the pricing of the notes, Nutanix entered
into convertible note hedge and warrant transactions with one or
more of the initial purchasers or their affiliates and other
financial institutions (the "option counterparties"). The
convertible note hedge transactions are generally expected to
reduce potential dilution to the common stock upon any conversion
of notes and/or offset any cash payments Nutanix is required to
make in excess of the principal amount of converted notes, as the
case may be. However, the warrant transactions could separately
have a dilutive effect to the extent that the market value per
share of the common stock exceeds the strike price of any warrants.
The strike price of the warrant transactions will initially be
$73.46 per share, which represents a premium of 100% over the last
reported sale price of the common stock on January 17, 2018, and is
subject to certain adjustments under the terms of the warrant
transactions. If the initial purchasers exercise their option to
purchase additional notes, Nutanix may enter into additional
convertible note hedge and additional warrant transactions relating
to the additional notes.
In connection with establishing their initial hedge of the
convertible note hedge and warrant transactions, the option
counterparties or their respective affiliates expect to purchase
shares of the common stock and/or enter into various derivative
transactions with respect to the 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 the common stock or the notes at that time.
In addition, the option counterparties and/or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to the common stock
and/or purchasing or selling the common stock 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 or following
any repurchase of notes by Nutanix on any fundamental change
repurchase date or otherwise). This activity could also cause or
avoid an increase or a decrease in the market price of the 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 notes, it could
affect the amount and value of the consideration that noteholders
will receive upon conversion of such notes. The convertible note
hedge transactions and warrant transactions have not been, and will
not 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. Any offer of the
securities will be made only by means of a private offering
memorandum. The notes and the shares of the common stock issuable
upon conversion of the notes, if any, will not be registered under
the Act or any state securities law, and unless so registered, may
not be offered or sold in the United States except pursuant to an
applicable exemption from the registration requirements of the Act
and applicable state securities laws.
About Nutanix
Nutanix makes infrastructure invisible, elevating IT to focus on
the applications and services that power their business. The
Nutanix Enterprise Cloud OS software leverages web-scale
engineering and consumer-grade design to natively converge compute,
virtualization and storage into a resilient, software-defined
solution with rich machine intelligence. The result is predictable
performance, cloud-like infrastructure consumption, robust
security, and seamless application mobility for a broad range of
enterprise applications and services.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
statements involve risks and uncertainties that could cause actual
results to differ materially, including, but not limited to,
whether Nutanix will be able to consummate the offering, the final
terms of the offering, the satisfaction of customary closing
conditions with respect to the offering of the notes, prevailing
market conditions, the anticipated use of the net proceeds of the
offering of the notes which could change as a result of market
conditions or for other reasons, whether the convertible note hedge
and warrant transactions will become effective, and the impact of
general economic, industry or political conditions in the United
States or internationally. Forward-looking statements may be
identified by the use of the words "may," "will," "expect,"
"intend," and other similar expressions. These forward-looking
statements are based on estimates and assumptions by Nutanix's
management that, although believed to be reasonable, are inherently
uncertain and subject to a number of risks. Actual results may
differ materially from those anticipated or predicted by Nutanix's
forward-looking statements. All forward-looking statements are
subject to other risks detailed in our Quarterly Report on Form
10-Q for the quarter ended October 31, 2017 and the risks discussed
in our other filings with the Securities and Exchange Commission.
You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
All forward-looking statements are qualified in their entirety by
this cautionary statement, and we undertake no obligation to revise
or update this news release to reflect events or circumstances
after the date hereof, except as required by applicable law.
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version on businesswire.com: http://www.businesswire.com/news/home/20180118005606/en/
Nutanix, Inc.Investor Contact:Tonya Chin,
408-560-2675VP of Investor Relations & Corporate
Communicationstonya@nutanix.comorMedia Contact:Jennifer
Massaro, 408-309-6886Director, Corporate
Communicationsjennifer.massaro@nutanix.com
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