Progress Software Announces Proposed Convertible Senior Notes Offering

BEDFORD, Mass., April 07, 2021 (GLOBE NEWSWIRE) -- Progress Software Corporation (NASDAQ: PRGS) (“Progress”) today announced that it intends to offer, subject to market and other conditions, $300.0 million aggregate principal amount of Convertible Senior Notes due 2026 (the “Notes”), to be sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Progress also expects to grant to the initial purchasers of the Notes an option to purchase up to an additional $45.0 million aggregate principal amount of the Notes, for settlement within a 13-day period beginning on, and including, the first date on which the Notes are issued.

The Notes will be Progress’ senior unsecured obligations. The Notes will mature on April 15, 2026, unless earlier converted, redeemed or repurchased.

Progress will satisfy its conversion obligations by paying cash up to the aggregate principal amount of Notes to be converted and pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election, in respect of the remainder. The maturity date, interest rate, the initial conversion rate and the other terms of Notes will be determined upon pricing of the offering.

Progress intends to use a portion of the net proceeds from the offering to fund the cost of entering into the capped call transactions described below. In addition, Progress expects to use up to $20 million of the net proceeds from the offering to repurchase shares of its common stock concurrently with the pricing of this offering in privately negotiated transactions effected through one of the initial purchasers or its affiliate, as its agent. Progress intends to use the remaining net proceeds of this offering to fund acquisitions and/or for general corporate purposes. However, Progress has no current agreements with respect to any specific acquisition or strategic transaction.

In connection with the pricing of the Notes, Progress expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers and/or their respective affiliates and/or other financial institutions (the “option counterparties”). The capped call transactions will cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of shares of common stock initially underlying the Notes. If the initial purchasers exercise their option to purchase additional Notes, then Progress expects to enter into additional capped call transactions with the option counterparties. The capped call transactions are expected generally to reduce potential dilution to Progress’ common stock upon conversion of the Notes and/or offset any cash payments Progress is required to make in excess of the aggregate principal amount of converted Notes, as the case may be, with such reduction or offset subject to a cap. The cap price of the capped call transactions and the premium payable will be determined at the time of pricing of the offering.