Penguin Solutions, Inc. (“Penguin Solutions”) (Nasdaq: PENG), a
leading designer and developer of high-performance,
high-availability enterprise solutions, today announced the closing
of the previously announced strategic investment of SK Telecom
(“SKT”) (NYSE: SKM), an affiliate of SK Group. SKT, through Astra
AI Infra LLC, a special purpose vehicle formed by SKT to consummate
the Investment, has acquired 200,000 convertible preferred shares,
par value $0.03 per share, of Penguin Solutions (the “CPS”), at a
purchase price of $1,000 per share (the “Investment”). The CPS are
convertible into ordinary shares, par value $0.03 per share, of
Penguin Solutions (the “Ordinary Shares”), at a conversion price of
$32.80784 per preferred share, subject to adjustment upon the
occurrence of certain events. The CPS entitle the holder to receive
dividends of 6% per annum, cumulative, and payable quarterly
in-kind or in cash at Penguin Solutions’ option, subject to certain
conditions. A holder of the CPS may convert such holder’s CPS into
Ordinary Shares at any time, provided that the CPS may, at Penguin
Solutions’ option, automatically be converted into Ordinary Shares
on any date following the second year anniversary of the closing of
the Investment upon which the volume-weighted average price of the
Ordinary Shares for any fifteen consecutive trading day period
equals or exceeds 150% of the then-applicable conversion price.
The gross proceeds to Penguin Solutions from the transaction are
$200 million, before deducting fees and other transaction expenses
payable by Penguin Solutions. Penguin Solutions intends to use the
net proceeds from the transaction to enhance its capabilities and
add to Penguin Solutions’ financial flexibility as it further
expands the scope and scale of its Penguin Solutions branded
end-to-end AI factory offerings.
In connection with the Investment, Penguin Solutions has added
Min Yong Ha to its Board of Directors, as a designee of SKT. Mr. Ha
has served as SKT’s Chief Development Officer since April 2022.
Previously, Mr. Ha also served as the Chief Executive Officer of AI
semiconductor companies and affiliates of SKT, SAPEON Inc. from
July 2024 until November 2024 and SAPEON Korea Inc. from July 2024
until December 2024. Prior to his positions at SKT and its
affiliates, Mr. Ha held various positions at SKT, including as Vice
President, Global Alliance, Vice President, Corporate Planning and
Vice President, Innovation Suite. Mr. Ha also serves on the boards
of several companies, including SKT affiliates, Pacific Telecom,
Inc., ID Quantique, and Rebellions Inc. Mr. Ha holds an M.B.A from
Indiana University.
To reflect the accounting impact of the Investment, the Company
is updating its diluted earnings per share outlook for fiscal year
2025, which was previously provided on October 15, 2024. The
updated diluted earnings per share outlook for fiscal year 2025
incorporates the non-cash effect of the CPS issued at Closing, the
estimated future payments to holders of the CPS equal to six (6)%
per annum, as described above, and the estimated interest income
from the proceeds. The Company’s update to its diluted earnings per
share outlook for fiscal year 2025 is solely a result of the
Closing.
Previous GAAP
Outlook
Adjustments
Previous Non-GAAP
Outlook
Diluted earnings per share
$0.30 +/- $0.20
$1.40
(A)(B)(C)(D)
$1.70 +/- $0.20
Updated GAAP
Outlook
Adjustments
Updated Non-GAAP
Outlook
Diluted earnings per share
$0.10 +/- $0.20
$1.40
(A)(B)(C)(D)
$1.50 +/- $0.20
Non-GAAP adjustments (in
millions)
(A) Share-based compensation and
amortization of acquisition-related intangibles included in cost of
sales
$
31
(B) Share-based compensation and
amortization of acquisition-related intangibles included in R&D
and SG&A
48
(C) Other adjustments
12
(D) Estimated income tax effects
(12
)
$
79
As previously announced, the Company will host its quarterly
financial webcast and conference call for its first quarter fiscal
year 2025 earnings after market close on Wednesday, January 8,
2025, beginning at 1:30 p.m. Pacific Time (PT) / 4:30 p.m. Eastern
Time (ET).
The securities described above were offered in a private
placement under Section 4(a)(2) of the Securities Act of 1933, as
amended (the “Securities Act”), and, along with the shares of
Ordinary Shares underlying the CPS, have not been registered under
the Securities Act, or applicable state securities laws.
Accordingly, the securities described above, including the shares
of Ordinary Shares underlying the CPS, may not be offered or sold
in the United States except pursuant to an effective registration
statement or an applicable exemption from the registration
requirements of the Securities Act and such applicable state
securities laws.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy the securities in this offering,
nor shall there be any sale of these securities in any state or
other 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 other jurisdiction.
Advisors
Centerview Partners acted as exclusive financial advisor to
Penguin Solutions. Latham & Watkins acted as legal advisor to
Penguin Solutions. Baker McKenzie acted as legal advisor to
SKT.
About Penguin Solutions
The most exciting technological advancements are also the most
challenging for companies to adopt. At Penguin Solutions, we
support our customers in achieving their ambitions across our
computing, memory, and LED lines of business. With our expert
skills, experience, and partnerships, we turn our customers’ most
complex challenges into compelling opportunities. For more
information, visit www.penguinsolutions.com.
About SKT
SKT has been leading the growth of the mobile industry since
1984. Now, it is taking customer experience to new heights by
extending beyond connectivity. By placing AI at the core of its
business, SKT is rapidly transforming into an AI company with a
strong global presence. It is focusing on driving innovations in
areas of AI Infrastructure, AI Transformation (AIX) and AI Service
to deliver greater value for industry, society, and life.
Use of Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act, Section 21E of
the Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995. All statements contained
in this press release that do not relate to matters of historical
fact should be considered forward-looking statements. These
statements include, but are not limited to, statements concerning
Penguin Solutions’ anticipated use of proceeds from the SKT
investment. Forward-looking statements often use words such as
“anticipate,” “target,” “expect,” “estimate,” “intend,” “plan,”
“believe,” “could,” “will,” “may” and other words of similar
meaning. These forward-looking statements are based on current
expectations and preliminary assumptions that are subject to
factors and uncertainties that could cause actual results to differ
materially from those described in these forward-looking
statements. These forward-looking statements are subject to a
number of risks, uncertainties and other factors, many of which are
outside Penguin Solutions’ control, including, among others,
failure to realize opportunities relating to Penguin Solutions’
growth and stakeholder value and other factors and risks detailed
in Penguin Solutions’ filings with the U.S. Securities and Exchange
Commission (which include Penguin Solutions’ most recent Annual
Report on Form 10-K), including Penguin Solutions’ future filings.
Such factors and risks as outlined above and in such filings do not
constitute all factors and risks that could cause actual results of
Penguin Solutions to be materially different from Penguin
Solutions’ forward-looking statements. Accordingly, investors are
cautioned not to place undue reliance on any forward-looking
statements. These forward-looking statements are made as of the
date of this press release, and Penguin Solutions does not intend,
and has no obligation, to update or revise any forward-looking
statements in order to reflect events or circumstances that may
arise after the date of this press release, except as required by
law.
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version on businesswire.com: https://www.businesswire.com/news/home/20241216906217/en/
Investor Contact Suzanne Schmidt Investor Relations (510)
360-8596 ir@penguinsolutions.com
PR Contact Maureen O’Leary Penguin Solutions
Corporate Communications (602) 330-6846 pr@penguinsolutions.com
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