A10 Networks plans $200 million convertible notes offering

SAN JOSE, Calif. - A10 Networks, Inc. (NYSE: ATEN), a provider of security and infrastructure solutions with a market capitalization of $1.45 billion and impressive gross profit margins of 80%, announced on Wednesday its intention to offer $200 million in convertible senior notes due in 2030 to qualified institutional buyers. According to InvestingPro analysis, the company maintains strong financial health with more cash than debt on its balance sheet. The private offering aims to raise funds exempt from the Securities Act of 1933 registration requirements.

The notes, set to mature on April 1, 2030, will be senior unsecured obligations of the company and will accrue interest payable semi-annually. With a healthy current ratio of 2.49 and strong cash flows sufficient to cover interest payments, the company appears well-positioned to manage this debt obligation. The initial conversion rate and interest rate will be determined at the time of the offering’s pricing.

A10 Networks will not redeem the notes before April 5, 2028. After this date and until the 60th scheduled trading day before the maturity date, redemption is possible under specific conditions, such as the company’s common stock price reaching a certain threshold.

In the event of a "fundamental change," noteholders may require A10 Networks to repurchase their notes for cash at the principal amount plus accrued interest.

The company plans to allocate approximately $44.2 million of the net proceeds to repurchase shares of its common stock concurrently with the pricing of the offering, intending to use the rest for general corporate purposes, which may include future acquisitions. The stock has shown strong momentum, gaining nearly 48% over the past six months. For deeper insights into A10 Networks’ valuation and growth potential, investors can access comprehensive analysis through InvestingPro, which offers exclusive financial metrics and expert research reports.

The share repurchases are part of a program authorized by A10 Networks’ board of directors in 2024 and will reduce the available amount under this program. These repurchases could affect the market price of the company’s common stock and the notes.

The notes and any common stock issued upon conversion will not be registered under the Securities Act or any other securities laws and will be offered under an exemption from these regulations.

This announcement is based on a press release statement and is not an offer to sell or the solicitation of an offer to buy securities. The offering of notes is not contingent upon the share repurchases.

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