PagerDuty Announces Pricing of $350 Million Convertible Senior Notes Offering

PagerDuty, a global leader in digital operations management, has announced the pricing of $350 million principal amount of 1.50% Convertible Senior Notes due 2028 in a private placement. The offering is expected to close on October 13, 2023, subject to customary closing conditions.

The notes will be senior unsecured obligations of PagerDuty and will accrue interest payable semiannually. The initial conversion rate of the notes will be 36.5647 shares of PagerDuty’s common stock per $1,000 principal amount of such notes. This represents a premium of approximately 27.5% over the last reported sale price of PagerDuty’s common stock on the New York Stock Exchange on October 10, 2023.

PagerDuty estimates that the net proceeds from the offering will be approximately $339.4 million, after deducting the initial purchasers’ discount and estimated offering expenses. The company plans to use a portion of the net proceeds to pay the cost of capped call transactions and to repurchase certain of its existing convertible senior notes due 2025. The remainder of the net proceeds will be used for working capital or other general corporate purposes, including potential acquisitions and strategic transactions.

In connection with the pricing of the notes, PagerDuty has entered into capped call transactions to offset potential dilution to its common stock resulting from any conversion of notes. The capped call transactions cover the number of shares of PagerDuty’s common stock that will initially underlie the notes.

PagerDuty’s offering of the notes and capped call transactions will provide the company with additional financial flexibility and support its growth initiatives. The company’s Operations Cloud is trusted by customers worldwide to drive digital transformation, compress costs, accelerate productivity, and ensure seamless digital experiences.

PagerDuty’s forward-looking statements highlight the potential risks and uncertainties associated with the offering and related transactions. However, the company remains committed to updating and revising its statements as necessary to provide accurate information to investors.

Overall, PagerDuty’s successful pricing of the notes demonstrates investor confidence in the company’s growth prospects and its ability to navigate the digital operations management landscape. With the additional capital, PagerDuty is well-positioned to continue its mission of empowering organizations to deliver exceptional digital experiences and drive business success.