Applied Digital Corporation announced the upsize and pricing of its offering of 2.75% Convertible Senior Notes due 2030, totaling $375 million in aggregate principal amount. The initial purchasers fully exercised their option to purchase an additional $75 million in notes, bringing the total offering to $450 million.
The offering is expected to close on November 4, 2024, with estimated net proceeds of approximately $434.5 million if the option is fully exercised. Applied Digital plans to use $84 million of these proceeds for share repurchases, including $52.7 million for a prepaid forward repurchase and $31.3 million for concurrent common stock repurchases.
Additionally, approximately $43.1 million of the net proceeds will be used to pay for capped call transactions, with the remainder allocated for general corporate purposes. The initial conversion price for the notes is set at approximately $9.75 per share, representing a 32.5% premium over the common stock's closing price of $7.36 on October 30, 2024. The capped call transactions have a cap price of $14.72 per share, a 100% premium over the same closing price.
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