Varonis Systems Unveils Plans for Convertible Notes Offering
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Varonis Systems Announces Convertible Notes Offering
Varonis Systems, Inc. (NASDAQ: VRNS) has made an exciting announcement regarding its plans to offer $350 million in Convertible Senior Notes due in 2029 as part of a private offering. The offering is designed for qualified institutional buyers and is subject to prevailing market conditions. Additionally, Varonis has set provisions for initial purchasers to acquire up to an additional $52.5 million.
Details of the Convertible Notes
The notes will be unsecured senior obligations that mature on September 15, 2029, unless they are converted or repurchased beforehand. Interest will be payable semiannually beginning on March 15, 2025. Holders may convert the notes under certain conditions until shortly before maturity, with settlement options including cash, shares of common stock, or a mix of both. Importantly, these notes won't be redeemable at the company’s discretion prior to September 20, 2027.
Utilizing Proceeds for Growth
Varonis plans to allocate the net proceeds from this offering to bolster working capital and general corporate needs, which can encompass research and development as well as capital expenditures. Moreover, the funds could potentially support acquisitions or investments in technologies and businesses that align with Varonis’s strategic goals, even though there are currently no significant agreements in place.
Introducing Capped Call Transactions
To complement the pricing of the notes, Varonis intends to engage with initial purchasers for capped call transactions. This approach aims to minimize potential stock dilution upon conversion and manage any cash payment obligations exceeding the principal amount of the notes. If additional notes are purchased, Varonis may enter further capped call agreements.
A Strategic Financial Move
As the offering progresses, activities involving derivative transactions and stock purchases related to the capped call transactions may influence the market price of Varonis’s common stock. This strategic financial move could be pivotal for Varonis, allowing them to navigate market fluctuations effectively as they secure the necessary funding to support their growth initiatives.
Offering Compliance and Legal Considerations
The offering is only intended for qualified institutional buyers, adhering to exemptions under the Securities Act. As such, the notes and the shares convertible from these notes have not been registered and will not be, reinforcing the structured approach to compliance within this offering.
About Varonis
Varonis is recognized as a leader in data security, uniquely positioned to tackle challenges differing from conventional cybersecurity enterprises. Their innovative cloud-native Data Security Platform diligently discovers and classifies critical data while proactively addressing potential risks and threats through AI-powered automation.
Globally, numerous organizations place their trust in Varonis to protect their data across various environments, including SaaS and hybrid cloud setups. With offerings that span data access governance, security posture management, and insider risk management, Varonis demonstrates their commitment to safeguarding data integrity.
Investor Relations Contact:
Tim Perz
Varonis Systems, Inc.
646-640-2112
investors@varonis.com
News Media Contact:
Rachel Hunt
Varonis Systems, Inc.
877-292-8767 (ext. 1598)
pr@varonis.com
Frequently Asked Questions
What are the Convertible Senior Notes being offered?
Varonis is offering $350 million worth of Convertible Senior Notes, which are debt securities that can be converted into common stock under certain conditions.
Who can purchase these notes?
The notes are available exclusively to qualified institutional buyers as per regulatory guidelines.
What is the primary use of funds from this offering?
The proceeds will support working capital, corporate growth initiatives, and potentially fund acquisitions and technology investments.
When will the interest on the notes be paid?
Interest will be paid semiannually, starting March 15, 2025.
Are there any risks associated with investing in Varonis?
As with any investment, risks include market volatility, conversion terms of the notes, and broader economic factors that may impact the company's operational performance.
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