$AKAM · AKAMAI TECHNOLOGIES INC
Akamai priced a private Rule 144A offering of $1.1B in 1.00% convertible senior notes due 2028 and $1.1B in 1.00% convertible senior notes due 2031, with an option for initial purchasers to buy up to $150M more of each series. Net proceeds are estimated at ~$2,164.2M (or ~$2,459.7M if the option is fully exercised). Proceeds will repay at maturity a portion of the $1.15B 0.375% convertible notes due 2027, fund Cloud Infrastructure Services capex, and cover ~$250.3M net cost of convertible note hedge transactions.
- 2028 notes convert at 8.8963 shares per $1,000, a ~40.0% premium to the $80.29 close.
- 2031 notes convert at 9.7685 shares per $1,000, a ~27.5% premium to the $80.29 close.
- Akamai entered convertible note hedge and warrant transactions to reduce dilution upon conversion.
- Net proceeds estimated at ~$2,164.2M, rising to ~$2,459.7M if the overallotment option is fully exercised.
- Proceeds will fund Cloud Infrastructure Services capex and repay 2027 convertible notes.
Extended-hours last trade $82.87, down 1.02% vs the $83.73 regular close, a modest negative reaction to the dilutive convertible offering.
A $2.2B convertible raise signals Akamai is funding its cloud infrastructure expansion with low-cost debt while managing dilution via hedges.
Convertible issuance at 1.00% coupons reflects Akamai's investment-grade-style financing to fund its capital-intensive Cloud Infrastructure Services buildout.
Warrant transactions could have a dilutive effect if the stock exceeds the warrant strike price; hedge counterparty trading may increase or decrease the share price.