Five9, Inc. (NASDAQ: FIVN), a leading provider of the intelligent cloud contact center, today announced the exercise and closing of the entire $97.5 million aggregate principal amount of the option to purchase additional 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"), resulting in a total offering size of $747.5 million. The notes sold in connection with the exercise of the option to purchase additional notes have the same terms in all respects as the notes previously sold in such offering.
The net proceeds from the sale of the notes in connection with the exercise of the option to purchase additional notes were approximately $95.1 million, after deducting the initial purchasers’ discounts. Five9 used $11.8 million of the proceeds from the exercise of the option to purchase additional notes to enter into additional capped call transactions with the initial purchasers and/or their respective affiliates (the "option counterparties"). The remainder of the net proceeds from the offering will be used for working capital and other general corporate purposes.
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.
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. 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 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 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.
This news release contains certain forward-looking statements, including statements regarding the anticipated effects of the related 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) 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, (ii) 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 (iii) 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.
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.
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