Varonis Systems, Inc. Announces Proposed Offering of $350 Million of Convertible Senior Notes
Varonis Systems (VRNS) has announced plans to offer $350 million in Convertible Senior Notes due 2029, with an option for initial purchasers to buy an additional $52.5 million. The notes will be unsecured senior obligations, maturing on September 15, 2029, with interest payable semiannually. They will be convertible under certain conditions and can be settled in cash, Varonis common stock, or a combination.
The company intends to use the proceeds for working capital, general corporate purposes, and potential acquisitions. Varonis also plans to enter into capped call transactions to reduce potential dilution from the notes. The offering is to qualified institutional buyers under Rule 144A of the Securities Act.
Varonis Systems (VRNS) ha annunciato l'intenzione di offrire 350 milioni di dollari in Note Convertibili Senior con scadenza nel 2029, con un'opzione per i compratori iniziali di acquistare ulteriori 52,5 milioni di dollari. Le note saranno obbligazioni senior non garantite, con scadenza il 15 settembre 2029, e interessi pagabili semestralmente. Saranno convertibili a determinate condizioni e potranno essere liquidate in contante, azioni ordinarie Varonis, o una combinazione di entrambe.
La società intende utilizzare i proventi per capitale circolante, scopi aziendali generali e potenziali acquisizioni. Varonis prevede inoltre di entrare in transazioni capped call per ridurre la potenziale diluizione derivante dalle note. L'offerta è destinata a compratori istituzionali qualificati ai sensi della Regola 144A del Securities Act.
Varonis Systems (VRNS) ha anunciado planes para ofrecer 350 millones de dólares en Notas Convertibles Senior con vencimiento en 2029, con una opción para que los compradores iniciales adquieran 52,5 millones de dólares adicionales. Las notas serán obligaciones senior no garantizadas, que vencerán el 15 de septiembre de 2029, con intereses pagaderos semestralmente. Serán convertibles bajo ciertas condiciones y se podrán liquidar en efectivo, acciones ordinarias de Varonis, o una combinación de ambas.
La compañía tiene la intención de utilizar los ingresos para capital de trabajo, propósitos corporativos generales, y adquisiciones potenciales. Varonis también planea celebrar transacciones capped call para reducir la posible dilución de las notas. La oferta está dirigida a compradores institucionales calificados según la Regla 144A de la Ley de Valores.
Varonis Systems (VRNS)는 2029년 만기인 3억 5천만 달러의 전환 선순위 채권을 제공할 계획을 발표했습니다. 초기 구매자에게 추가로 5천250만 달러를 구매할 옵션도 있습니다. 이 채권은 담보가 없는 선순위 의무로, 2029년 9월 15일에 만기가 되며, 이자는 반기별로 지급됩니다. 특정 조건에 따라 전환 가능하며 현금, Varonis 보통주 또는 이들의 조합으로 결제할 수 있습니다.
회사는 운전자본, 일반 기업 목적 및 잠재적 인수를 위해 수익을 사용할 계획입니다. Varonis는 또한 채권에서 발생할 수 있는 잠재적 희석을 줄이기 위해 캡드 콜 거래를 진행할 계획입니다. 이 제안은 증권법 제144A 조항에 따라 자격을 갖춘 기관 투자자들에게 제공됩니다.
Varonis Systems (VRNS) a annoncé son intention d'offrir 350 millions de dollars en Obligations Senior Convertibles échéant en 2029, avec une option pour les acheteurs initiaux d'acheter 52,5 millions de dollars supplémentaires. Les obligations seront des engagements seniors non garantis, arrivant à échéance le 15 septembre 2029, avec des intérêts payables semestriellement. Elles seront convertibles sous certaines conditions et peuvent être réglées en espèces, en actions ordinaires Varonis, ou en une combinaison des deux.
La société a l'intention d'utiliser les produits pour le fonds de roulement, les objectifs corporatifs généraux et les acquisitions potentielles. Varonis prévoit également d'entrer dans des transactions capped call pour réduire la dilution potentielle des obligations. L'offre s'adresse à des acheteurs institutionnels qualifiés selon la règle 144A de la Loi sur les Valeurs mobilières.
Varonis Systems (VRNS) hat Pläne angekündigt, 350 Millionen Dollar in wandelbaren vorrangigen Anleihen mit Fälligkeit 2029 anzubieten, mit einer Option für Erstkäufer, zusätzliche 52,5 Millionen Dollar zu erwerben. Die Anleihen werden unbesicherte vorrangige Verpflichtungen sein, die am 15. September 2029 fällig werden, mit halbjährlicher Zinszahlung. Sie werden unter bestimmten Bedingungen wandelbar sein und können in Bargeld, Aktien von Varonis oder einer Kombination aus beidem beglichen werden.
Das Unternehmen beabsichtigt, die Einnahmen für Betriebskapital, allgemeine Unternehmenszwecke und potenzielle Übernahmen zu verwenden. Varonis plant außerdem, cap-call-Transaktionen durchzuführen, um potenzielle Verwässerung durch die Anleihen zu reduzieren. Das Angebot richtet sich an qualifizierte institutionelle Käufer gemäß Regel 144A des Wertpapiergesetzes.
- Potential to raise up to $402.5 million in capital through the convertible note offering
- Flexibility in settlement options for the notes (cash, stock, or combination)
- Implementation of capped call transactions to potentially reduce dilution impact
- Increase in long-term debt obligations
- Potential dilution of existing shareholders if notes are converted to common stock
- Additional interest expenses that may impact future profitability
Insights
Varonis Systems' proposed
The capped call transactions are a strategic move to mitigate potential dilution, protecting current shareholders' interests. However, investors should note that these financial maneuvers could impact stock price in the short term due to hedging activities by option counterparties. The conversion option starting from September 20, 2027, at
Varonis Systems' decision to raise capital through convertible notes suggests confidence in their future growth prospects within the data security and analytics sector. As a tech company, the allocation of funds towards R&D is important for maintaining competitiveness in the rapidly evolving cybersecurity landscape. The potential for acquisitions hints at a strategy to expand their technological capabilities or market reach.
The 2029 maturity date provides a substantial runway for Varonis to execute on its growth plans. The convertible nature of the notes could be attractive to investors who see long-term potential in Varonis' technology and market position. However, the tech sector's volatility and the competitive nature of the cybersecurity market mean that Varonis must use these funds effectively to stay ahead of technological trends and market demands.
The timing of Varonis' convertible note offering is intriguing, given the current market conditions and investor sentiment towards tech stocks. The Rule 144A private placement to qualified institutional buyers suggests a targeted approach to fundraising, potentially indicating strong interest from sophisticated investors who see value in Varonis' long-term prospects.
The flexibility in settlement options (cash, stock, or a combination) upon conversion provides Varonis with strategic financial management tools. The market's reaction to this offering will be telling, potentially influencing Varonis' stock price and investor perception. The capped call transactions demonstrate management's proactive approach to managing potential dilution, which could be viewed positively by the market. Investors should monitor how efficiently Varonis deploys this capital, as it will be important in determining the company's future market position and financial performance.
NEW YORK, Sept. 05, 2024 (GLOBE NEWSWIRE) -- Varonis Systems, Inc. (Nasdaq: VRNS) (“Company” or “Varonis”) announced today its intention to offer
The Notes will be unsecured senior obligations of the Company. The Notes will mature on September 15, 2029, unless earlier converted, redeemed or repurchased. Interest will be payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2025.
The Notes will be convertible at the option of the holders, prior to the close of business on the business day immediately preceding March 15, 2029, only under certain circumstances and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Notes may be settled, at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock. The Notes will not be redeemable at the Company’s option prior to September 20, 2027. On or after September 20, 2027 and on or prior to the 41st scheduled trading day immediately preceding the maturity date, the Notes will be redeemable at the Company’s option if the last reported sale price of the Company’s common stock has been at least
The Company intends to use the net proceeds from the offering (including any net proceeds from the sale of any additional Notes that may be sold should the initial purchasers exercise their option to purchase additional Notes) for working capital and general corporate purposes, which may include research and development, capital expenditures and other general corporate purposes. The Company may also use a portion of the net proceeds to acquire or make investments in businesses, products, offerings, and technologies, although the Company does not have agreements or commitments for any material acquisitions or investments at this time. The Company also intends to use a portion of the net proceeds from this offering to pay the cost of capped call transactions described below.
In connection with the pricing of the Notes, the Company intends to enter into capped call transactions with one or more of the initial purchasers and/or their respective affiliates and/or other financial institutions (the “Option Counterparties”). The capped call transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the Notes and/or offset any cash payments the Company 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. If the initial purchasers exercise their option to purchase additional Notes, the Company intends to enter into additional capped call transactions with the Option Counterparties.
The Company expects that, in connection with establishing their initial hedges of the capped call transactions, the Option Counterparties and/or their respective affiliates will enter into various derivative transactions with respect to the Company’s common stock concurrently with or shortly after the pricing of the Notes and/or purchase shares of the Company’s 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 Company’s 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 Company’s common stock and/or purchasing or selling the Company’s common stock or other securities of the Company 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 of the Notes, any repurchase of the Notes by the Company on any fundamental change repurchase date, any redemption date, or any other date on which the Notes are retired by the Company, in each case, if the Company exercises its option to terminate the relevant portion of the capped call transactions). This activity could also cause or avoid an increase or a decrease in the market price of the Company’s common stock or the Notes, which could affect holders’ ability 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 shares of common stock, if any, and value of the consideration that noteholders will receive upon conversion of the Notes.
The Notes will only be offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Notes and the shares of the Company’s common stock into which the Notes are convertible have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in the United States except pursuant to an applicable exemption from such registration requirements.
This press release is neither an offer to sell nor a solicitation of an offer to buy the Notes or the shares of the Company’s common stock into which the Notes are convertible, nor will there be any offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Forward-Looking Statements
This press release contains “forward-looking” statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including statements regarding whether the Company will offer and issue the notes and the terms of the notes, the anticipated use of the net proceeds from the offering, the Company’s expectations in respect of granting the initial purchasers an option to purchase additional notes, and expectations regarding whether the Company will enter into the capped call transactions, the effect of the capped call transactions and regarding actions of the option counterparties and/or their respective affiliates, are forward-looking statements. These statements are not guarantees of future performance but are based on management’s expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: risks related to whether the Company will offer the Notes or consummate the offering of the Notes on the expected terms, or at all; the anticipated use of the net proceeds of the offering; the fact that the Company’s management will have broad discretion in the use of the proceeds from any sale of the Notes; whether the capped call transactions will become effective on the anticipated terms or at all and the Company’s discretion on whether to exercise the option to terminate a portion of the capped call transactions upon certain events in respect of the Notes; the impact of potential information technology, cybersecurity or data security breaches; risks associated with anticipated growth in Varonis’ addressable market; general economic and industry conditions, such as foreign currency exchange rate fluctuations and expenditure trends for data and cybersecurity solutions; Varonis’ ability to predict the timing and rate of subscription renewals and their impact on the Company’s future revenues and operating results; risks associated with international operations; the impact of global conflicts on the budgets of Varonis’ clients and on economic conditions generally; competitive factors, including increased sales cycle time, changes in the competitive environment, pricing changes and increased competition; the risk that Varonis may not be able to attract or retain employees, including sales personnel and engineers; Varonis’ ability to build and expand its direct sales efforts and reseller distribution channels; risks associated with the closing of large transactions, including Varonis’ ability to close large transactions consistently on a quarterly basis; new product introductions and Varonis’ ability to develop and deliver innovative products; Varonis’ ability to provide high-quality service and support offerings; the expansion of cloud-delivered services; and risks associated with Varonis’ previously issued convertible notes and capped-call transaction. These and other important risk factors are described more fully in Varonis’ reports and other documents filed with the Securities and Exchange Commission and could cause actual results to vary from expectations. All information provided in this press release is as of the date hereof, and Varonis undertakes no duty to update or revise this information, whether as a result of new information, new developments or otherwise, except as required by law.
About Varonis
Varonis is a leader in data security, fighting a different battle than conventional cybersecurity companies. Its cloud-native Data Security Platform continuously discovers and classifies critical data, removes exposures, and detects advanced threats with AI-powered automation.
Thousands of organizations worldwide trust Varonis to defend their data wherever it lives - across SaaS, IaaS, and hybrid cloud environments. Customers use Varonis to automate a wide range of security outcomes, including data security posture management (DSPM), data classification, data access governance (DAG), data detection and response (DDR), data loss prevention (DLP), and insider risk management.
Investor Relations Contact:
Tim Perz
Varonis Systems, Inc.
646-640-2112
investors@varonis.com
News Media Contact:
Rachel Hunt
Varonis Systems, Inc.
877-292-8767 (ext. 1598)
pr@varonis.com
FAQ
What is the total amount of Convertible Senior Notes Varonis Systems (VRNS) plans to offer?
When will the Varonis Systems (VRNS) Convertible Senior Notes mature?
How does Varonis Systems (VRNS) plan to use the proceeds from the Convertible Senior Notes offering?
What measures is Varonis Systems (VRNS) taking to mitigate potential stock dilution from the Convertible Senior Notes?
