Super Micro reports pricing of private offering of $2B convertible senior notes

Super Micro (SMCI) Computer announced the pricing of $2B aggregate principal amount of convertible senior notes due 2030. The Convertible Notes are being offered and sold to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act of 1933, as amended. The company also granted an option to the initial purchasers to purchase up to an additional $300M aggregate principal amount of the Convertible Notes within a 13-day period from, and including, the date the Convertible Notes are first issued. The Convertible Notes will have an initial conversion rate of 18.1154 shares of the company’s common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $55.20 per share of the company’s common stock, representing an initial conversion premium of approximately 35.0% above the closing price of $40.89 per share of the company’s common stock on June 23. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. The company will receive net proceeds from the offering of approximately $1.96B, or approximately $2.26B if the initial purchasers exercise their option to purchase additional Convertible Notes in full. The company expects to use $158.4M of the net proceeds of the offering to fund the cost of entering into the capped call transactions, and approximately $200M of the net proceeds to repurchase shares of its common stock concurrently, and intends to use the remainder of the net proceeds from the offering for general corporate purposes, including to fund working capital for growth and business expansion.