Zscaler Announces Pricing of $1.0 Billion Offering 0.125% Convertible Senior Notes Due 2025

SAN JOSE, Calif., June 23, 2020 (GLOBE NEWSWIRE) -- Zscaler, Inc. (Nasdaq: ZS) today announced the pricing of $1.0 billion aggregate principal amount of 0.125% convertible senior notes due 2025 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Zscaler also granted the initial purchasers of the notes a 13-day option to purchase up to an additional $150.0 million aggregate principal amount of notes. The offering is expected to close on June 25, 2020, subject to customary closing conditions.

The notes will be senior unsecured obligations of Zscaler and will accrue interest at a rate of 0.125% per year, payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2021. The notes will mature on July 1, 2025, unless earlier converted, repurchased or redeemed. The initial conversion rate will be 6.6315 shares of Zscaler’s common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $150.80 per share). The initial conversion price of the notes represents a premium of approximately 37.5% over the closing price of Zscaler’s common stock on June 22, 2020. The notes will be convertible under certain circumstances into cash, shares of Zscaler’s common stock or a combination of cash and shares of Zscaler’s common stock, at Zscaler’s election.

Zscaler may redeem for cash all or any portion of the notes, at its option, on or after July 5, 2023 and prior to the 21st scheduled trading day immediately preceding the maturity date if the last reported sale price of Zscaler’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 Zscaler 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.