IRVINE, Calif. — August 7, 2019 — Alteryx, Inc. (NYSE: AYX) announced today the pricing of $350.0 million aggregate principal amount of 0.50% Convertible Senior Notes due 2024 (the “2024 notes”) and $350.0 million aggregate principal amount of 1.00% Convertible Senior Notes due 2026 (the “2026 notes” and together with the 2024 notes, the “notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended (the “Act”). Alteryx also granted the initial purchasers of the notes a 30-day over-allotment option to purchase up to an additional $50.0 million aggregate principal amount of 2024 notes and up to an additional $50.0 million aggregate principal amount of 2026 notes. The sale is expected to close on August 12, 2019, subject to customary closing conditions.
The 2024 notes will be senior, unsecured obligations of Alteryx, and will bear interest of 0.50% per year payable semi-annually in arrears. The 2026 notes will be senior, unsecured obligations of Alteryx, and will bear interest of 1.00% per year payable semi-annually in arrears. The 2024 notes will mature on August 1, 2024, unless earlier converted or repurchased. The 2026 notes will mature on August 1, 2026, unless earlier converted or repurchased. Prior to May 1, 2024, in the case of the 2024 notes, and prior to May 1, 2026, in the case of the 2026 notes, the relevant series of notes will be convertible at the option of holders of such series of notes only under certain circumstances, and thereafter, at any time prior to the close of business on the second scheduled trading day immediately preceding the relevant maturity date. Upon conversion, the notes may be settled in shares of Alteryx Class A common stock, cash, or a combination thereof, at the election of Alteryx.
Alteryx may not redeem the 2024 notes or the 2026 notes prior to the relevant maturity date of such series of notes. Holders of the relevant series of notes will have the right to require Alteryx to repurchase for cash all or a portion of their notes of such series at 100% of their principal amount of the relevant series of notes to be repurchased, plus any accrued and unpaid interest to, but excluding the relevant repurchase date upon the occurrence of a fundamental change (as defined in the indenture relating to the notes). Alteryx will also be required to increase the conversion rate for the relevant series of notes for holders who convert their notes of the relevant series in connection with certain corporate events occurring prior to the relevant maturity date of such series of notes.
The conversion rate for the 2024 notes will initially be 5.2809 shares of Alteryx Class A common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $189.36 per share of Alteryx Class A common stock) and the conversion rate for the 2026 notes will initially be 5.2809 shares of Alteryx Class A common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $189.36 per share of Alteryx Class A common stock). The initial conversion price of the 2024 notes and 2026 notes represents a premium of approximately 50.0% to the $126.24 per share closing price of Alteryx Class A common stock on The New York Stock Exchange on August 7, 2019.
Alteryx estimates that the aggregate net proceeds from the offering will be approximately $683.4 million (or $781.2 million if the initial purchasers exercise their over-allotment option to purchase additional notes in full), after deducting the initial purchasers’ discount and estimated offering expenses payable by Alteryx. Alteryx intends to use approximately $76.4 million of the aggregate net proceeds from the offering of the notes to pay the cost of the capped call transactions described below. Alteryx intends to use $145.4 million of the aggregate net proceeds from the offering and to issue approximately 2.2 million shares of Alteryx Class A common stock to repurchase, exchange, or otherwise retire (such transactions, the “repurchases”) approximately $145.2 million principal amount of its existing 0.50% Convertible Senior Notes due 2023 (the “2023 notes”) through individually negotiated transactions concurrently with the offering. These repurchases could increase (or reduce the size of any decrease in) the market price of Alteryx Class A common stock or the notes. In the case of repurchases effected concurrently with the offering, this activity could affect the market price of Alteryx Class A common stock concurrently with the pricing of the notes, and could result in a higher effective conversion prices for the two series of notes.
Alteryx intends to use the remainder of the aggregate net proceeds from the offering for general corporate purposes, which may include investments, acquisitions, or other strategic transactions. However, Alteryx has not designated any specific uses and has no current agreements or commitments with respect to any material investment, acquisition, or strategic transaction.
If the initial purchasers exercise their option to purchase additional notes, Alteryx intends to use a portion of the net proceeds from the sale of additional notes to fund the cost of entering into additional capped call transactions. Any remaining net proceeds from the sale of additional notes will be used for general corporate purposes.
In connection with the pricing of the notes, Alteryx has entered into privately negotiated capped call transactions with certain financial institutions (the “capped call counterparties”). The capped call transactions are expected generally to offset potential dilution to holders of Alteryx’s Class A common stock upon any conversion of the notes and/or offset the potential cash payments that Alteryx could be required to make in excess of the principal amount of any converted notes upon conversion thereof, with such reduction and/or offset subject to a cap based on the cap price. The cap price of the capped call transactions will initially be approximately $315.60 per share, which represents a premium of approximately 150.0% over the last reported sale price of Alteryx’s common stock of $126.24 per share on August 7, 2019, and is subject to certain adjustments under the terms of the capped call transactions.
In connection with establishing their initial hedges of the capped call transactions, the capped call counterparties have advised Alteryx that they and/or their respective affiliates expect to purchase Alteryx Class A common stock and/or enter into various derivative transactions with respect to Alteryx Class A common stock concurrently with, or shortly after, the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Alteryx Class A common stock or the notes at that time.
In addition, the capped call counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Alteryx Class A common stock and/or purchasing or selling Alteryx Class A common stock in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during any observation period related to a conversion of notes or following any repurchase of notes by Alteryx on any fundamental change repurchase date or otherwise). This activity could also cause or avoid an increase or decrease in the market price of Alteryx Class A common stock or the notes, which could affect noteholders’ ability to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of notes, it could affect the amount and value of the consideration that noteholders will receive upon conversion of such notes.
In connection with any repurchase of the 2023 notes, Alteryx intends to terminate a corresponding portion of the existing capped call transactions that Alteryx entered into when the 2023 notes were issued. In connection with any such termination, the counterparties to such existing capped call transactions and/or their respective affiliates may modify their hedge positions, which could affect the market price of Alteryx’s Class A common stock and the initial conversion prices of the 2024 notes and/or the 2026 notes in the offering.
This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities (including the shares of Alteryx Class A common stock, if any, into which the notes are convertible) and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. Any offers of the notes will be made only to qualified institutional buyers pursuant to Rule 144A promulgated under the Act by means of a private offering memorandum.
The notes and any shares of Alteryx Class A common stock issuable upon conversion of the notes have not been and will not be registered under the Act, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
Use of forward looking statements
This press release contains “forward-looking statements” including, among other things, the completion, timing and size of the offering, the potential effects of entering into new capped call transactions and terminating a portion of Alteryx’s existing capped call transactions and the related unwinding of the existing hedge positions of the counterparties to such existing capped call transactions, the potential effects of the repurchases, and the expected use of proceeds from the offering. Statements containing words such as “could,” “believe,” “expect,” “intend,” “will,” or similar expressions constitute forward-looking statements. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, whether or not Alteryx will consummate the offering, prevailing market conditions, the anticipated use of the proceeds of the offering, which could change as a result of market conditions or for other reasons, the impact of general economic, industry or political conditions in the United States or internationally, and whether the capped call transactions, termination of the previous capped calls, or the repurchases will become effective. The foregoing list of risks and uncertainties is illustrative, but is not exhaustive. For information about other potential factors that could affect Alteryx’s business and financial results, please review the “Risk Factors” described in Alteryx’s Annual Report on Form 10-K for the year ended December 31, 2018 and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 filed with the Securities and Exchange Commission, or SEC, and in Alteryx’s other filings with the SEC. Except as may be required by law, Alteryx undertakes no obligation, and does not intend, to update these forward-looking statements after the date of this release.