Dynatrace is planning a $1.25 billion private placement of exchangeable senior notes due 2031, with the AI-powered observability company expecting to use up to approximately $200 million of the proceeds to repurchase its own shares. Dynatrace LLC, an indirect wholly owned subsidiary, will issue the notes.
The initial purchasers are expected to receive an option to purchase another $187.5 million of notes, potentially increasing the total offering to approximately $1.44 billion.
The notes will be senior unsecured obligations and will be fully and unconditionally guaranteed by Dynatrace.
They mature on September 1, 2031, unless exchanged, redeemed or repurchased earlier.
The interest rate and exchange rate will be determined when the offering is priced.
The securities will be exchangeable at Dynatrace’s election for cash, common shares or a combination of the two.
A portion of the proceeds will be used for exchangeable note hedge transactions intended to reduce potential dilution or offset cash obligations arising from exchanges.
Dynatrace also expects to enter warrant transactions, which could create separate dilution if its share price ultimately exceeds the warrant strike price.
Up to approximately $200 million of the offering proceeds are expected to fund concurrent share repurchases from certain purchasers of the notes.
The remaining proceeds will be available for general corporate purposes.
The offering is being marketed to qualified institutional buyers under Rule 144A and remains subject to market conditions.
