SAN FRANCISCO, Sept. 14, 2018 /PRNewswire/ -- DocuSign,
Inc. ("DocuSign") (Nasdaq: DOCU) today announced the pricing
of $500 million principal amount of 0.50% Convertible
Senior Notes due 2023 in a private placement to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the "Securities Act"). The principal amount of
the offering was increased from the previously announced offering
size of $400 million. DocuSign also
granted the initial purchasers of the notes an option to purchase
up to an additional $75 million principal amount of
notes. The sale of the notes is expected to close on September 18, 2018, subject to customary closing
conditions.
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The notes will be senior unsecured obligations of DocuSign and
will accrue interest payable semiannually in arrears on
March 15 and September 15 of each year, beginning on
March 15, 2019, at a rate of 0.50%
per year. The notes will mature on September
15, 2023, unless earlier converted, repurchased or redeemed.
The initial conversion rate will be 13.9860 shares of DocuSign's
common stock per $1,000 principal
amount of notes (equivalent to an initial conversion price of
approximately $71.50 per share). The
initial conversion price of the notes represents a premium of
approximately 30% over the public offering price of DocuSign's
concurrent common stock offering described below. The notes will be
convertible into cash, shares of DocuSign's common stock or a
combination of cash and shares of DocuSign's common stock, at
DocuSign's election.
DocuSign may redeem the notes, at its option, on or after
September 20, 2021, if the last
reported sale price of DocuSign'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,
and including, the trading day immediately preceding on the date on
which DocuSign provides notice of redemption at a redemption price
equal to 100% of the principal amount of the notes to be redeemed,
plus accrued and unpaid interest to, but excluding, the redemption
date.
If DocuSign undergoes a "fundamental change", holders of the
notes may require DocuSign to repurchase for cash all or any
portion of their notes at a repurchase price equal to 100% of the
principal amount of the notes to be repurchased, plus accrued and
unpaid interest. In addition, upon certain corporate events or upon
redemption, DocuSign will, under certain circumstances, increase
the conversion rate for holders who convert notes in connection
with such a corporate event or redemption.
DocuSign estimates that the net proceeds from the offering will
be approximately $487.6 million (or
$560.8 million if the initial
purchasers exercise their option to purchase additional notes in
full), after deducting the initial purchasers' discount and
estimated offering expenses payable by DocuSign. DocuSign intends
to use a portion of the net proceeds from the offering to pay the
cost of the capped call transactions described below. DocuSign
intends to use the remainder of the net proceeds for working
capital and other general corporate purposes. DocuSign may also use
a portion of the net proceeds for the acquisition of, or investment
in, technologies, solutions or businesses that complement its
business, although it has no commitments to enter into any such
acquisitions or investments at this time. If the initial purchasers
exercise their option to purchase additional notes, DocuSign
expects to use a portion of the net proceeds from the sale of the
additional notes to enter into additional capped call transactions
as described below. DocuSign intends to use the remainder of the
net proceeds from the sale of the additional notes for working
capital and other general corporate purposes.
In connection with the pricing of the notes, DocuSign entered
into capped call transactions with one or more of the initial
purchasers or their respective affiliates and/or other financial
institutions (the "option counterparties"). The capped call
transactions are expected generally to offset the potential
dilution to DocuSign's common stock upon any conversion of notes
and/or offset any cash payments DocuSign is required to make in
excess of the principal amount of converted notes, as the case may
be, with such offset subject to a cap based on a cap price. The cap
price of the capped call transactions will initially be
approximately $110.00, which
represents a premium of approximately 100% over the public offering
price of DocuSign's concurrent common stock offering described
below, and is subject to certain adjustments under the terms of the
capped call transactions.
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties or their
respective affiliates may purchase shares of DocuSign's common
stock and/or enter into various derivative transactions with
respect to DocuSign's common stock concurrently with or shortly
after the pricing of the notes, including with certain investors in
the notes. This activity could increase (or reduce the size of any
decrease in) the market price of DocuSign's common stock or the
notes at that time.
In addition, DocuSign expects that the option counterparties or
their respective affiliates may modify their hedge positions by
entering into or unwinding various derivatives with respect to
DocuSign's common stock and/or purchasing or selling DocuSign's
common stock or other securities of DocuSign in secondary market
transactions following the pricing of the notes and prior to the
maturity of the notes (and are likely to do so on each exercise
date for the capped call transactions, which are expected to occur
during the 30 trading day period beginning on the 31st scheduled
trading day prior to the maturity date of the notes). This activity
could also cause or prevent an increase or a decrease in the market
price of DocuSign's common stock or the notes, which could affect a
noteholder's ability to convert its notes and, to the extent the
activity occurs during any observation period related to a
conversion of notes, this could affect the amount and value of the
consideration that a noteholder will receive upon conversion of its
notes.
DocuSign also announced today the pricing of a concurrent
underwritten public offering of 8,060,550 shares of its common
stock by certain selling stockholders at a public offering price of
$55.00 per share. Such selling
stockholders also granted the underwriters a 30-day option to
purchase up to an additional 1,209,082 shares of the DocuSign's
common stock. The notes offering is not contingent upon the
concurrent public offering of common stock, and the concurrent
public offering of common stock is not contingent upon the notes
offering.
Neither the notes, nor any shares of DocuSign's common stock
issuable upon conversion of the notes, have been registered under
the Securities Act or any state securities laws, and unless so
registered, may not be offered or sold in the United
States absent registration or an applicable exemption from, or
in a transaction not subject to, the registration requirements of
the Securities Act and other applicable securities laws.
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
state or jurisdiction in which such offer, solicitation or sale
would be unlawful prior to the registration or qualification under
the securities laws of any such state or jurisdiction.
About DocuSign
Founded in 2003, DocuSign helps organizations connect and
automate how they prepare, sign, act-on, and manage agreements. As
part of its cloud-based System of Agreement Platform, DocuSign
offers eSignature—the market-leading way to sign electronically on
practically any device, from almost anywhere, at any time. Today,
more than 425,000 customers and hundreds of millions of users in
over 180 countries use DocuSign to accelerate the process of doing
business and simplify people's lives.
Investor Relations:
Annie
Leschin
VP Investor Relations
415-489-1005
annie.leschin@docusign.com
Media Relations:
Adrian
Wainwright
Head of Communications
media@docusign.com
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SOURCE DocuSign, Inc.