Datadog Announces Pricing of Upsized Offering of $870 Million Convertible Senior Notes
Datadog announced the pricing of $870 million 0% Convertible Senior Notes due 2029, an increase from the previously announced $775 million. The company expects net proceeds of approximately $851.6 million, which could rise to $979.0 million if initial purchasers exercise their additional notes option. The notes will mature on December 12, 2029, with an initial conversion rate of 4.5955 shares per $1,000 principal amount, equivalent to $217.60 per share.
The proceeds will be used to pay $87.8 million for capped call transactions, repurchase $112.0 million of existing 2025 notes, and fund general corporate purposes. The conversion price represents a 35% premium over the last reported stock price, and the company implemented protective measures through capped call transactions to reduce potential dilution.
Datadog ha annunciato la vendita di note senior convertibili da $870 milioni al tasso dello 0%, con scadenza nel 2029, un incremento rispetto ai $775 milioni annunciati in precedenza. L'azienda prevede proventi netti di circa $851,6 milioni, che potrebbero salire a $979,0 milioni se gli acquirenti iniziali esercitano l'opzione di note addizionali. Le note scadranno il 12 dicembre 2029, con un tasso di conversione iniziale di 4,5955 azioni per ogni $1.000 di importo nominale, equivalente a $217,60 per azione.
I proventi saranno utilizzati per pagare $87,8 milioni per le operazioni di capped call, riacquistare $112 milioni di note 2025 esistenti e finanziare scopi aziendali generali. Il prezzo di conversione rappresenta un premio del 35% rispetto all'ultimo prezzo delle azioni riportato, e l'azienda ha attuato misure protettive tramite operazioni di capped call per ridurre la possibile diluizione.
Datadog anunció la venta de notas senior convertibles de $870 millones a una tasa del 0%, con vencimiento en 2029, un aumento respecto a los $775 millones anunciados anteriormente. La empresa espera ingresos netos de aproximadamente $851,6 millones, que podrían aumentar a $979,0 millones si los compradores iniciales ejercen su opción de notas adicionales. Las notas vencerán el 12 de diciembre de 2029, con una tasa de conversión inicial de 4,5955 acciones por cada $1.000 de monto principal, equivalente a $217,60 por acción.
Los ingresos se utilizarán para pagar $87,8 millones por transacciones de capped call, recomprar $112 millones de notas existentes de 2025 y financiar propósitos corporativos generales. El precio de conversión representa una prima del 35% sobre el último precio de las acciones reportado, y la empresa implementó medidas protectoras a través de transacciones de capped call para reducir la posible dilución.
데이터독은 2029년에 만기되는 0% 전환 사채 8억 7천만 달러의 가격을 발표했으며, 이는 이전에 발표된 7억 7천5백만 달러에서 증가한 것입니다. 이 회사는 약 8억 5천1백60만 달러의 순수익을 예상하고 있으며, 초기 구매자가 추가 사채 옵션을 행사할 경우 9억 7천9백만 달러로 증가할 수 있습니다. 이 사채는 2029년 12월 12일에 만기되며, 초기 전환 비율은 1,000달러의 원금당 4.5955주로, 이는 주당 217.60달러에 해당합니다.
수익금은 8천7백80만 달러를 capped call 거래에 지불하고, 1억 1천2백만 달러 규모의 기존 2025년 사채를 재매입하며, 일반 기업 목적에 자금을 지원하는 데 사용됩니다. 전환 가격은 마지막으로 보고된 주가에 대해 35%의 프리미엄을 나타내며, 회사는 가능한 희석을 줄이기 위해 capped call 거래를 통해 보호 조치를 시행했습니다.
Datadog a annoncé le prix d'obligations convertibles seniors de 870 millions de dollars à 0% échéant en 2029, une augmentation par rapport aux 775 millions de dollars précédemment annoncés. L'entreprise s'attend à des produits nets d'environ 851,6 millions de dollars, qui pourraient atteindre 979,0 millions de dollars si les acheteurs initiaux exercent leur option de notes supplémentaires. Les obligations arriveront à échéance le 12 décembre 2029, avec un taux de conversion initial de 4,5955 actions pour 1 000 dollars de montant principal, ce qui équivaut à 217,60 dollars par action.
Les produits seront utilisés pour payer 87,8 millions de dollars pour des transactions de capped call, racheter 112 millions de dollars d'obligations 2025 existantes et financer des objectifs généraux de l'entreprise. Le prix de conversion représente une prime de 35 % par rapport au dernier prix des actions reporté, et l'entreprise a mis en place des mesures de protection via des transactions de capped call pour réduire la dilution potentielle.
Datadog gab die Platzierung von 870 Millionen Dollar an 0%-konvertierbaren nachrangigen Anleihen mit Fälligkeit 2029 bekannt, was eine Erhöhung gegenüber den zuvor angekündigten 775 Millionen Dollar darstellt. Das Unternehmen erwartet Nettoerlöse von etwa 851,6 Millionen Dollar, die auf 979,0 Millionen Dollar steigen könnten, wenn die Ersterwerber ihre Option auf zusätzliche Anleihen ausüben. Die Anleihen haben eine Fälligkeit am 12. Dezember 2029 und eine anfängliche Umwandlungsrate von 4,5955 Aktien pro 1.000 Dollar Nennwert, was 217,60 Dollar pro Aktie entspricht.
Die Erlöse werden verwendet, um 87,8 Millionen Dollar für capped call Transaktionen zu zahlen, 112 Millionen Dollar bestehende Anleihen von 2025 zurückzukaufen und allgemeine Unternehmenszwecke zu finanzieren. Der Umwandlungspreis stellt eine Prämie von 35 % gegenüber dem zuletzt gemeldeten Aktienkurs dar, und das Unternehmen hat durch capped call Transaktionen Schutzmaßnahmen implementiert, um mögliche Verwässerungen zu vermeiden.
- Successful upsizing of convertible note offering from $775M to $870M
- Zero interest rate on the convertible notes, reducing interest expense
- 35% conversion premium provides downside protection
- Capped call transactions implemented to minimize dilution risk
- Potential dilution risk if notes are converted to common stock
- Increased debt obligation of $870M
- Premium payment of $196.8M for repurchasing 2025 notes versus their $112.0M principal amount
Insights
The
Strategic financial moves include repurchasing
The complex transaction structure, including capped call transactions and concurrent 2025 notes repurchase, demonstrates sophisticated financial engineering to optimize capital structure. The
Market impact considerations include potential short-term pressure from hedging activities by option counterparties, but the overall transaction should support long-term stock stability. The
The notes will be general unsecured obligations of Datadog and will not bear regular interest and the principal amount of the notes will not accrete. The notes will mature on December 1, 2029, unless earlier converted, redeemed or repurchased.
Datadog estimates that the net proceeds from the offering will be approximately
Datadog expects to use a portion of the net proceeds from the offering to pay the approximately
Before September 1, 2029, holders will have the right to convert their notes only upon the satisfaction of specified conditions and during certain periods. On or after September 1, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time. Upon conversion, Datadog will pay or deliver, as the case may be, cash, shares of Datadog's Class A common stock, par value
Datadog may not redeem the notes prior to December 6, 2027. Datadog may redeem for cash all or any portion of the notes (subject to the partial redemption limitation described below), at its option, on or after December 6, 2027, if the last reported sale price of the Class A common stock has been at least
If Datadog undergoes a "fundamental change" (as defined in the indenture that will govern the notes), then, subject to certain conditions and limited exceptions, holders of the notes may require Datadog to repurchase for cash all or any portion of their notes at a repurchase price equal to
In connection with the pricing of the notes, Datadog entered into privately negotiated capped call transactions with certain of the initial purchasers or affiliates thereof and other financial institutions (the "option counterparties"). The capped call transactions cover, subject to customary adjustments substantially similar to those applicable to the notes, the number of shares of Class A common stock initially underlying the notes. The capped call transactions are generally expected to reduce the potential dilution to the Class A common stock upon any conversion of notes and/or offset any cash payments Datadog 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 relating to the notes will initially be
In connection with establishing their initial hedges of the capped call transactions, Datadog expects the option counterparties or their respective affiliates will enter into various derivative transactions with respect to the Class A common stock and/or purchase shares of Class A common stock concurrently with or shortly after the pricing of the notes, including with, or from, certain investors in the notes. This activity could increase (or reduce the size of any decrease in) the market price of the Class A common stock or the trading price of 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 Class A common stock and/or purchasing or selling shares of Class A common stock or other securities of Datadog 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, to the extent Datadog exercises the relevant election under the capped call transactions, following any repurchase or redemption of the notes). This activity could also cause or avoid an increase or a decrease in the market price of the Class A common stock or the trading price of the notes, which could affect a holder's ability 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 number of shares, if any, and value of the consideration that a holder will receive upon conversion of its notes.
Concurrently with the pricing of the notes in the offering, Datadog entered into privately negotiated transactions with certain holders of the 2025 notes to repurchase, for approximately
In connection with any note repurchase transaction, Datadog expects that holders of the 2025 notes who agree to have their 2025 notes repurchased and who have hedged their equity price risk with respect to such 2025 notes (the "hedged holders") will unwind all or part of their hedge positions by buying the Class A common stock and/or entering into or unwinding various derivative transactions with respect to the Class A common stock or other securities of Datadog. The amount of the Class A common stock to be purchased by the hedged holders or in connection with such derivative transactions may have been substantial in relation to the historic average daily trading volume of the Class A common stock. This activity by the hedged holders could increase (or reduce the size of any decrease in) the market price of the Class A common stock, including concurrently with the pricing of the notes, and may have resulted in a higher effective conversion price of the notes.
Additionally, in connection with the issuance of the 2025 notes, Datadog entered into capped call transactions (the "existing capped call transactions") with certain financial institutions (the "existing option counterparties"). In connection with the note repurchase transactions, Datadog intends to enter into agreements with the existing option counterparties to terminate a portion of the existing capped call transactions in a notional amount corresponding to the number of shares of the Class A common stock underlying the 2025 notes repurchased (such terminations, the "unwind transactions"). In connection with any such terminations of the existing capped call transactions, Datadog expects such existing option counterparties and/or their respective affiliates will unwind various derivatives with respect to the Class A common stock and/or sell shares of the Class A common stock or other securities of Datadog in the secondary market concurrently with or shortly after pricing of the notes. This activity could decrease (or reduce the size of any increase in) the market price of the Class A common stock at that time and could decrease (or reduce the size of any increase in) the trading price of the notes.
Neither the notes, nor any shares of Class A common stock issuable upon conversion of the notes, if any, have been, or will be, registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
About Datadog
Datadog is the observability and security platform for cloud applications. Our SaaS platform integrates and automates infrastructure monitoring, application performance monitoring, log management, user experience monitoring, cloud security and many other capabilities to provide unified, real-time observability and security for our customers' entire technology stack. Datadog is used by organizations of all sizes and across a wide range of industries to enable digital transformation and cloud migration, drive collaboration among development, operations, security and business teams, accelerate time to market for applications, reduce time to problem resolution, secure applications and infrastructure, understand user behavior and track key business metrics.
Forward-Looking Statements
This press release contains "forward-looking" statements, as that term is defined under the federal securities laws, including statements concerning the anticipated completion of the offering, the capped call transactions, the note repurchase transactions and any unwind transactions, the anticipated use of proceeds from the offering, and the potential impact of the foregoing or related transactions on dilution to holders of the Class A common stock and the market price of the Class A common stock, the trading price of the notes or the conversion price of the notes. These forward-looking statements are based on Datadog's current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause Datadog's actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement. These risks include, but are not limited to market risks, trends and conditions. These and other risks are more fully described in Datadog's filings with the Securities and Exchange Commission ("SEC"), including in the section entitled "Risk Factors" in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 and other filings and reports that Datadog may file from time to time with the SEC. Forward-looking statements represent Datadog's beliefs and assumptions only as of the date of this press release. Datadog disclaims any obligation to update forward-looking statements.
CONTACT INFORMATION
Yuka Broderick
Datadog Investor Relations
IR@datadoghq.com
Dan Haggerty
Datadog Corporate Communications
press@datadoghq.com
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SOURCE Datadog, Inc.
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