Cloudflare, Inc. announced its intention to offer $1.75 billion aggregate principal amount of Convertible Senior Notes due 2030 in a private offering. The company also expects to grant initial purchasers an option to purchase up to an additional $250 million aggregate principal amount of the notes.
These notes will be senior, unsecured obligations of Cloudflare and will be convertible into cash, shares of Cloudflare’s Class A common stock, or a combination thereof, at Cloudflare’s election. The interest rate, conversion rate, and other terms are to be determined upon pricing.
Cloudflare intends to use a portion of the net proceeds to pay the cost of capped call transactions, which are expected to offset potential stock dilution. The remaining proceeds are earmarked for general corporate purposes, including working capital, capital expenditures, repayment of outstanding indebtedness, and potential acquisitions and strategic transactions.
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