Snap Inc. plans to raise $750 million in a debt sale. The Snapchat parent says it “may” use some of those funds for acquisitions.
The money is other earmarked for “general corporate purposes” like working capital, operating expenses and capital expenditures. In terms of potential acquisitions, the Evan Spiegel-run company is considering “complementary businesses, products, services, or technologies or for repurchases of Snap’s common stock,” though Thursday’s announcement to shareholders specified that Snap has “no commitments for any material acquisitions or stock repurchases at this time.”
The debt sale to “qualified institutional buyers” will consist of convertible senior notes due 2025. Snap says it also intends to grant the initial purchasers of the notes an “option to purchase up to an additional $112.5 million principal amount of notes.”
The notes will accrue interest payable semiannually in arrears. They’ll mature on May 1, 2025, unless repurchased, redeemed, or converted in accordance with their terms prior to the maturity date.
The filing continues: “The notes will be convertible at the option of the holders prior to the close of business on the business day immediately preceding February 1, 2025 only on the satisfaction of certain conditions and during certain periods. After that, the notes will be convertible at the option of the holders at any time until the close of business on the business day immediately preceding the maturity date. On conversion, Snap will elect to settle the notes in cash, shares of Snap’s Class A common stock, or a combination of cash and shares of Snap’s Class A common stock. The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the offering.”
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