FireEye, Inc. Announces $525.0 Million Convertible Notes Offering

FireEye, Inc. (NASDAQ: FEYE) today announced its intention to offer, subject to market conditions and other factors, $525.0 million aggregate principal amount of convertible senior notes due 2024 (the “notes”), in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”). FireEye also intends to grant the initial purchasers of the notes a 13-day option to purchase up to an additional $75.0 million aggregate principal amount of the notes.

The notes will be unsecured, senior obligations of FireEye, and interest will be payable semi-annually in arrears. The notes will be convertible into cash, shares of FireEye’s common stock, or a combination thereof, at FireEye’s election. The interest rate, initial conversion rate, repurchase or redemption rights and other terms of the notes are to be determined upon pricing of the offering by negotiations between FireEye and the initial purchasers of the notes.

FireEye expects to use a portion of the net proceeds of the offering of the notes to pay the cost of capped call transactions described below and to use the remaining proceeds of the offering to repurchase, in separate, privately negotiated transactions, a portion of FireEye’s 1.000% Convertible Senior Notes due 2035 (the “1.000% Notes”) concurrently with this offering and for general corporate purposes, including capital expenditures, investments, working capital, retirement of debt securities and potential acquisitions and strategic transactions. FireEye has no definitive agreements with respect to any such acquisitions or transactions at this time.

FireEye expects that holders of the 1.000% Notes that sell their 1.000% Notes to FireEye may enter into and/or unwind various derivative transactions with respect to shares of FireEye’s common stock and/or purchase or sell shares of FireEye’s common stock in the market to hedge their exposure in connection with these transactions. In particular, FireEye expects that many of the holders with whom we negotiate the repurchase of the 1.000% Notes employ a convertible arbitrage strategy with respect to the 1.000% Notes and have a short position with respect to FireEye’s common stock that they would close, through the entry into and/or unwinding of various derivative transactions with respect to shares of FireEye’s common stock and/or purchases of FireEye’s common stock or other securities of FireEye (including the notes, in which case such a holder that employs a convertible arbitrage strategy may additionally sell shares of FireEye’s common stock in connection with such transactions), in connection with FireEye’s repurchase of their 1.000% Notes. This activity could increase (or reduce the size of any decrease in) the market price of FireEye’s common stock or the notes at that time (and any such sale activity could decrease (or reduce the size of any increase in) the market price of FireEye’s common stock or the notes at that time).