This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Salesforce.com Announces Pricing Of $1 Billion Offering Of 0.25% Convertible Senior Notes Due 2018

Stocks in this article: CRM

SAN FRANCISCO, March 12, 2013 /PRNewswire/ -- Salesforce.com (NYSE: CRM), the enterprise cloud computing company, today announced the pricing of $1 billion aggregate principal amount of convertible senior notes due 2018 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Act"). Salesforce.com also granted the initial purchasers of the notes an option to purchase up to an additional $150 million aggregate principal amount of the notes to cover overallotments. The sale of the notes to the initial purchasers is expected to settle on March 18, 2013, subject to customary closing conditions.

(Logo: http://photos.prnewswire.com/prnh/20050216/SFW105LOGO)

The notes will be unsecured, unsubordinated obligations of salesforce.com, and interest will be payable semi-annually at a rate of 0.25% per year. The initial conversion rate is 3.7628 shares of common stock per $1,000 principal amount of notes (which is equivalent to an initial conversion price of approximately $265.76 per share). Prior to January 1, 2018, the notes will be convertible only upon the occurrence of specified events; thereafter until maturity the notes will be convertible at any time.  Upon conversion, the notes will be settled in cash and shares of salesforce.com's common stock (subject to salesforce.com's right to pay cash in lieu of all or any portion of such shares).

In connection with the offering of the notes, salesforce.com entered into privately-negotiated convertible note hedge transactions with one or more of the initial purchasers and their affiliates and other financial institutions (the "hedge counterparties").  Salesforce.com also entered into privately-negotiated warrant transactions with the hedge counterparties. The strike price of the warrant transactions will initially be approximately $361.58 per share, which is 200% of the closing sale price of salesforce.com's common stock on March 12, 2013.  Taken together, the convertible note hedge transactions and the warrant transactions are expected, but not guaranteed, to reduce the potential dilution to salesforce.com's common stock upon the conversion of the notes.  Salesforce.com has been advised that in connection with hedging the convertible note hedge transactions and warrant transactions, the hedge counterparties may enter into various derivative transactions concurrently with or shortly after the pricing of the notes.  These activities could have the effect of increasing or preventing a decline in the price of salesforce.com's common stock concurrently with, or shortly after, the pricing of the notes. In addition, the hedge counterparties may modify their hedge positions from time to time following the pricing of the notes (and are particularly likely to do so during any observation period relating to a conversion of the notes) by entering into or unwinding derivative transactions with respect to salesforce.com's common stock, and/or by purchasing or selling shares of salesforce.com common stock or the notes.  Any of these activities could adversely affect the value of salesforce.com's common stock and the trading price of the notes.

Salesforce.com expects to use a portion of the net proceeds for the cost of the convertible note hedge transactions after such cost is offset by the proceeds of the warrant transactions described above, and to use the remaining proceeds for general corporate purposes, including funding possible acquisitions of, or investments in, complementary businesses, services or technologies, working capital and capital expenditures.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,373.79 -13.42 -0.08%
S&P 500 2,025.94 -3.61 -0.18%
NASDAQ 4,682.7950 +1.2980 0.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs