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SAN JOSE, Calif.–(BUSINESS WIRE)–8×8, Inc. (NYSE: EGHT) today announced its intention to offer, subject
to market conditions and other factors, $200.0 million aggregate
principal amount of convertible senior notes due 2024 (the “notes”) in a
private offering to qualified institutional buyers pursuant to an
exemption from the registration requirements of the Securities Act of
1933, as amended (the “Securities Act”). In connection with the
offering, 8×8 expects to grant the initial purchasers of the notes an
option to purchase up to an additional $30.0 million aggregate principal
amount of notes on the same terms and conditions.
8×8 intends to use a portion of the net proceeds from the offering of
the notes to pay the cost of certain capped call transactions (described
below). 8×8 intends to use the remainder of the net proceeds from the
offering of the notes for general corporate purposes, including
financing potential acquisitions and other strategic transactions.
However, 8×8 currently has no commitments with respect to any such
acquisitions or other strategic transactions.
When issued, the notes will be unsecured, senior obligations of 8×8, and
interest will be payable semi-annually. Prior to October 1, 2023, the
notes will become convertible only under certain circumstances and
during certain periods. 8×8 will settle conversions of the notes by
paying or delivering, as the case may be, cash, shares of its common
stock, or a combination of cash and shares of its common stock, at its
election. Final terms of the notes, including the interest rate, the
initial conversion rate, repurchase or redemption rights, and other
terms, will be determined at the time of pricing by negotiations between
8×8 and the initial purchasers of the notes.
If the initial purchasers exercise their option to purchase additional
notes, 8×8 intends to use the resulting additional proceeds of the sale
of the additional notes to pay the cost of entering into additional
capped call transactions and for general corporate purposes, including
financing potential acquisitions and other strategic transactions.
In connection with the pricing of the notes, 8×8 expects to enter into
privately negotiated capped call transactions with one or more financial
institutions, which may include 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 reduce or offset the potential dilution to 8×8’s common
stock upon any conversion of the notes at maturity and/or offset the
potential cash payments 8×8 is required to make in excess of the
principal amount of converted notes, with such reduction and/or offset
subject to a cap based on the cap price. If the initial purchasers
exercise their option to purchase additional notes, 8×8 expects to enter
into additional capped call transactions with the option counterparties.
8×8 expects that, in connection with establishing their initial hedge of
the capped call transactions, the option counterparties or their
respective affiliates will purchase shares of 8×8’s common stock and/or
enter into various derivative transactions with respect to 8×8’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 8×8’s common stock or the notes at that time, and could
result in a higher effective conversion price for the notes.
In addition, 8×8 has been advised by the option counterparties that the
option counterparties or their respective affiliates may modify their
hedge positions by entering into or unwinding various derivative
transactions with respect to 8×8’s common stock and/or purchasing or
selling 8×8’s common stock in secondary market transactions following
the pricing of the notes and prior to the maturity of the notes (and are
likely to do so during the valuation period for the capped call
transactions, which is expected to occur during the 40 trading day
period beginning on the 41st scheduled trading day prior to the maturity
of the notes). This activity could also cause or avoid an increase or a
decrease in the market price of 8×8’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, it could affect the amount and value of the
consideration that noteholders will receive upon conversion of the notes.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities and shall not constitute an
offer, solicitation or sale in any jurisdiction in which such offer,
solicitation or sale is unlawful. The notes and the shares of 8×8’s
common stock issuable upon conversion of the notes, if any, have not
been 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 exemption from such
registration requirements.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding the intention to offer the notes, the
intended use of net proceeds from the offering and the expected terms of
the offering. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially,
including risks related to whether 8×8 will offer the notes or
consummate the offering of the notes on the expected terms, or at all,
the potential impact of market and other general economic conditions,
whether 8×8 will be able to satisfy the conditions required to close any
sale of the notes, the anticipated use of the net proceeds of the
offering, the fact that 8×8’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 other risks detailed from time to time in 8×8’s filings with
the Securities and Exchange Commission, including its Quarterly Report
on Form 10-Q for the quarterly period ended December 31, 2018. The
forward-looking statements in this press release are based on
information available to 8×8 as of the date hereof, and 8×8 does not
assume any obligation to update the forward-looking statements provided
to reflect events that occur or circumstances that exist after the date
on which they were made except as otherwise required by law.
Contacts
Investor Relations Contact:
Victoria Hyde-Dunn
8×8, Inc.
1-669-333-5200
victoria.hyde-dunn@8×8.com
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