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SAN JOSE, Calif. - A10 Networks, Inc. (NYSE: ATEN), a provider of security and infrastructure solutions with an impressive 80% gross profit margin and market capitalization of $1.45 billion, announced the pricing of its $200 million offering of 2.75% convertible senior notes due 2030. According to InvestingPro analysis, the company maintains strong financial health with more cash than debt on its balance sheet. The private offering targets qualified institutional buyers and is set to close on March 17, 2025, with customary closing conditions.
The notes, which are senior unsecured obligations, will accrue interest semi-annually with a maturity date of April 1, 2030, unless they are converted, redeemed, or repurchased prior. The initial conversion rate is set at approximately 42.6257 shares of common stock per $1,000 principal amount of notes, equating to an initial conversion price of around $23.46 per share. This price is a 20% premium over the Company’s last reported sale price of its common stock.
Redemption of the notes is not permissible before April 5, 2028. However, post that date and up to the 60th scheduled trading day before maturity, A10 Networks may choose to redeem the notes for cash under certain conditions.
In the event of specific corporate changes or a ’fundamental change,’ as defined in the indenture, noteholders may have the option to require the Company to repurchase their notes for cash.
A10 Networks anticipates net proceeds from the offering to be approximately $193.8 million, or $218.1 million if the initial purchasers’ option to buy additional notes is fully exercised. The Company plans to allocate about $44.2 million of the net proceeds to repurchase shares of its common stock concurrently with the offering at a price of $19.55 per share. With a healthy current ratio of 2.49 and minimal debt-to-equity of 0.05, InvestingPro data shows the company’s liquid assets comfortably exceed its short-term obligations. Discover 10+ additional exclusive insights and detailed financial metrics with an InvestingPro subscription. The remaining proceeds are earmarked for general corporate purposes, which could include future acquisitions or investments, though there are no current commitments.
The offering is not contingent upon the share repurchases, which are part of a share repurchase program authorized by A10 Networks’ board of directors in 2024.
The notes and any shares of common stock issuable upon their conversion have not been registered under the Securities Act or any other securities laws and will be offered only through exemptions or transactions not subject to registration requirements.
This news is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy securities. The stock has shown strong momentum with a 45% return over the past six months, and InvestingPro analysis indicates the stock is currently trading near its Fair Value. Access the comprehensive Pro Research Report, available for A10 Networks and 1,400+ other top US stocks, for deep-dive analysis and expert insights.
In other recent news, A10 Networks has announced plans to offer $200 million in convertible senior notes due in 2030. This private offering is aimed at qualified institutional buyers and is exempt from the Securities Act of 1933 registration requirements. The notes will accrue interest payable semi-annually, with specific rates to be determined at the time of pricing. A10 Networks intends to use approximately $44.2 million of the proceeds to repurchase shares of its common stock, with the remainder allocated for general corporate purposes, potentially including future acquisitions. The company will not redeem the notes before April 5, 2028, but redemption is possible under certain conditions after this date. Noteholders may also require repurchase for cash at the principal amount plus accrued interest in the event of a "fundamental change." The share repurchases are part of a program authorized by the board of directors in 2024 and could impact the market price of both the stock and the notes. The notes and any common stock issued upon conversion will not be registered under securities laws, following an exemption from these regulations.
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