Rapid7 Announces Pricing of $200 Million Convertible Senior Notes Offering

BOSTON, April 29, 2020 (GLOBE NEWSWIRE) -- Rapid7, Inc. (“Rapid7”) (Nasdaq: RPD) today announced the pricing of $200.0 million aggregate principal amount of 2.25% convertible senior notes due 2025 in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Rapid7 also granted the initial purchasers of the notes an option to purchase up to an additional $30.0 million aggregate principal amount of notes. The sale of the notes is expected to close on May 1, 2020, subject to customary closing conditions.

The notes will be general unsecured obligations of Rapid7 and will accrue interest payable semiannually in arrears on May 1 and November 1 of each year, beginning on November 1, 2020, at a rate of 2.25% per year. The notes will mature on May 1, 2025, unless earlier converted, redeemed or repurchased. The initial conversion rate will be 16.3875 shares of Rapid7’s common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $61.02 per share of Rapid7’s common stock). The initial conversion price of the notes represents a premium of approximately 30% over the last reported sale price of Rapid7’s common stock on April 28, 2020. The notes will be convertible into cash, shares of Rapid7’s common stock or a combination of cash and shares of Rapid7’s common stock, at Rapid7’s election.

Rapid7 may redeem for cash all or any portion of the notes, at its option on or after May 6, 2023, if the last reported sale price of Rapid7’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which Rapid7 provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

Rapid7 estimates that the net proceeds from the offering will be approximately $194.0 million (or approximately $223.2 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers’ discount and estimated offering expenses payable by Rapid7. Rapid7 intends to use $23.7 million of the net proceeds from the offering to pay the cost of the capped call transactions described below. Rapid7 intends to use the remainder of the net proceeds for working capital and other general corporate purposes.