Akamai Technologies Prices Private Offering Of $1.5 Bln Of Convertible Senior Notes Due 2033

(RTTNews) - Akamai Technologies Inc. (AKAM), the cybersecurity and cloud computing company that powers and protects business online, announced that it has priced its private offering of $1.5 billion in aggregate principal amount of convertible senior notes due 2033.

In addition, Akamai has granted the initial purchasers of the notes an option to purchase up to an additional $225.0 million in aggregate principal amount of notes on the same terms and conditions.

The sale of the notes is expected to close on May 19, 2025. The offering was upsized from the previously announced offering of $1.35 billion aggregate principal amount of convertible senior notes.

The notes will be senior unsecured obligations of Akamai and will mature on May 15, 2033, unless earlier converted or repurchased in accordance with their terms. The notes will bear interest at a rate of 0.25% per year, payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2025. The notes will be convertible prior to the close of business on the business day immediately preceding January 15, 2033 only under certain circumstances and will be convertible thereafter at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of these circumstances.

The conversion rate will initially be 10.7513 shares of Akamai's common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $93.01 per share of Akamai's common stock, subject to adjustments in certain events. The initial conversion price represents a premium of approximately 20% to the $77.51 per share closing price of Akamai's common stock on May 14, 2025. Akamai estimates that the net proceeds from this offering will be approximately $1.479 billion (or approximately $1.701 billion if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers' discounts and estimated offering expenses payable by Akamai.

Akamai intends to use the remaining net proceeds from the offering to repay approximately $250.0 million in borrowings outstanding under its five-year senior unsecured revolving credit facility and repay at maturity a portion of its $1.15 billion outstanding aggregate principal amount of 0.375% Convertible Senior Notes due 2027, which mature on September 1, 2027, and/or to pay cash amounts due upon any earlier conversion thereof.

Akamai intends to use $239.1 million of the net proceeds from this offering to pay the cost of the convertible note hedge transactions.

Akamai also intends to use approximately $300.0 million of the net proceeds from the offering to repurchase shares of its common stock from purchasers of the notes in the offering in privately-negotiated transactions effected through one or more of the initial purchasers or their affiliates. The purchase price per share in such transactions will equal $77.51, the closing price per share of Akamai's common stock on May 14, 2025.