Datadog Announces Pricing Of Upsized Offering Of $870 Mln Convertible Senior Notes

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(RTTNews) - Datadog, Inc. (DDOG), a software solutions provider, Tuesday announced the pricing of $870 million aggregate principal amount of 0% Convertible Senior Notes due 2029 in a private placement. The sale is expected to be finalized on December 12.

The size of the offering was raised from the originally planned $775 million total for the notes. Datadog also gave the initial buyers an option to purchase up to an extra $130 million worth of notes within 13 days after the notes were issued.

The company expects to raise about $851.6 million from the offering after subtracting discounts, commissions, and other costs. If the initial buyers choose to purchase all the additional notes, the total proceeds could reach around $979.0 million.

Datadog plans to use part of the money raised from the offering to cover the $87.8 million cost of capped call transactions and to buy back $112.0 million of its existing 0.125% Convertible Senior Notes due in 2025.

Holders can convert their notes before September 1, 2029, under certain conditions and at specific times. On or after September 1, they can convert them anytime until two days before the notes are due. When converting, Datadog can pay in cash, shares of its Class A stock, or a mix of both. Each $1,000 of notes can be converted into 4.5955 shares of stock, which is about $217.60 per share a 35 percent premium over the stock's price on December 9.

The cap price for the capped call transactions will start at $322.38, which is 100 percent higher than the last reported price of Datadog's Class A stock on December 9. Datadog plans to make deals with the current option parties to end some of the existing capped call transactions.

DDOG closed Monday's trading at $161.19, down 4.42%. In after-hours, the stock was up 0.09% at $161.33.