Dropbox Prices $1.1B Convertible Notes Offering
Dropbox, Inc. announced the pricing of $1.1 billion aggregate principal amount of 1.25% Convertible Senior Notes due 2031. The offering was upsized from $1.0 billion, and the initial purchasers exercised their option to purchase an additional $150 million. Net proceeds are expected to be approximately $1.082 billion. The company intends to use a portion of the proceeds for convertible note hedge transactions, to repurchase approximately $175 million of its Class A common stock, and to repay at least $750 million of its outstanding term loan facility. The notes are convertible into Class A common stock at an initial conversion rate of 24.5549 shares per $1,000 principal amount, equivalent to an initial conversion price of approximately $40.73 per share.
Key Highlights
- Dropbox priced $1.1 billion in 1.25% Convertible Senior Notes due 2031.
- The offering size was upsized from $1.0 billion, with an additional $150 million option exercised.
- Net proceeds are approximately $1.082 billion, or $1.230 billion if the option is fully exercised.
- Proceeds will fund convertible note hedge transactions, repurchase $175 million of Class A common stock, and repay at least $750 million of term loan facility.
- Initial conversion price is approximately $40.73 per share, representing a 25% premium to the November 9, 2026 closing price of $32.58.
- Dropbox entered into convertible note hedge and warrant transactions to manage potential dilution and cash payments.
Price Impact
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