Five9, Inc. (NASDAQ: FIVN), the Intelligent CX Platform
provider, today announced the pricing of $650.0 million aggregate
principal amount of 1.00% convertible senior notes due 2029 (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 offering size was increased from the previously
announced offering size of $600.0 million aggregate principal
amount of the notes. 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 March 1, 2024, subject to customary closing conditions,
and is expected to result in approximately $633.5 million (or, if
the initial purchasers fully exercise their option to purchase
additional notes, approximately $728.8 million) in net proceeds to
Five9 after deducting the initial purchasers’ discount and
estimated offering expenses payable by Five9.
The notes will be senior, unsecured obligations of Five9, and
interest will be payable semi-annually in arrears on March 15 and
September 15 of each year, beginning on September 15, 2024. The
notes will mature on March 15, 2029, unless earlier converted,
redeemed or repurchased. Five9 may not redeem the notes prior to
March 22, 2027; on or after March 22, 2027 and prior to December
15, 2028, Five9 may redeem the notes, at its option and subject to
certain conditions, as detailed below.
Five9 expects to use approximately $304.9 million of the net
proceeds of the offering of the notes to repurchase $313.1 million
aggregate principal amount of its outstanding 0.500% convertible
senior notes due 2025 (the “2025 notes”) (such transactions, the
“2025 note repurchases”). Five9 also expects to use approximately
$81.3 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 for
working capital and other general corporate purposes. Five9 expects
that holders of the 2025 notes that sell their 2025 notes to 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.
The initial conversion rate for the notes is 12.5918 shares of
common stock per $1,000 principal amount of notes (which is
equivalent to an initial conversion price of approximately $79.42
per share). Prior to the close of business on the business day
immediately preceding December 15, 2028, 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 $61.09 per share
last reported sale price of Five9’s common stock on the Nasdaq
Global Market on February 27, 2024.
Five9 may redeem all or any portion of the notes (subject to
certain limitations), at its option, on or after March 22, 2027 and
prior to December 15, 2028, at a cash 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 on, and including, the trading day 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 cash repurchase
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, Five9 will, under
certain circumstances, increase the conversion rate for holders who
elect to convert their notes in connection with such corporate
event or holders of called notes that elect to convert such notes
during the relevant redemption period, as applicable.
In connection with the pricing of the notes, Five9 entered into
capped call transactions with one of the initial purchasers and
other financial institutions (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 potential 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 $122.18 per share, which represents a premium of 100%
over the last reported sale price of Five9’s common stock of $61.09
per share on February 27, 2024, 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 (x)
during any observation period relating to a conversion of the notes
and (y) following any repurchase of notes by Five9 if Five9 elects
to unwind a corresponding portion of the capped call transactions
in connection with such repurchase). 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.
In connection with the issuance of the 2025 notes, Five9 entered
into capped call transactions (the “existing capped call
transactions”) with certain financial institutions (the “existing
capped call counterparties”). In connection with the 2025 note
repurchases, Five9 has entered into agreements with the existing
capped call counterparties to terminate a portion of the existing
capped call transactions in a notional amount corresponding to the
amount of the 2025 note repurchases. In connection with the
termination of these transactions, Five9 expects the existing
capped call counterparties or their respective affiliates to sell
shares of Five9’s common stock and/or unwind various derivatives
during an unwind period following the pricing of the notes to
unwind their hedge in connection with those transactions, which
could decrease, or reduce the size of any increase in, the market
price of Five9’s common stock during such unwind period. In
connection with the termination of the existing capped call
transactions, Five9 will receive payments from the existing capped
call counterparties that depend in part on the market price of
Five9’s common stock over the unwind period.
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 2025 note repurchases and the related unwind of the
corresponding portion of the existing capped call transactions, 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, changes in our business or for other
reasons, (v) whether the capped call transactions will become
effective, (vi) the impact of adverse general economic conditions,
including the impact of macroeconomic deterioration, including
continuing inflation, increased interest rates, supply chain
disruptions, decreased economic output and fluctuations in currency
rates, the impact of the Russia-Ukraine conflict, the impact of the
conflict in Israel, and other factors, that may continue to harm
our business; 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. 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
The Five9 Intelligent CX Platform provides a comprehensive suite
of solutions for orchestrating fluid customer experiences. Our
cloud-native, multi-tenant, scalable, reliable, and secure platform
includes contact center; omni-channel engagement; Workforce
Engagement Management; extensibility through more than 1,000
partners; and innovative, practical AI, automation and journey
analytics that are embedded as part of the platform. Five9 brings
the power of people, technology, and partners to more than 3,000
organizations worldwide.
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version on businesswire.com: https://www.businesswire.com/news/home/20240227490599/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. Lauren Sloane
Lauren@blueshirtgroup.com
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