Axon Enterprise priced a $1.0 billion offering of 0% convertible senior notes due 2031, with an option for underwriters to buy an additional $150.0 million. The company expects to receive about $986.0 million in net proceeds, or about $1.1343 billion if the full over-allotment is exercised.
From that total, Axon plans to use $99.9 million for capped call transactions, rising to about $114.9 million if the extra notes are sold. That leaves roughly $886.1 million for general corporate purposes, or about $1.0194 billion if the over-allotment is fully taken.
The notes carry no regular interest and mature on September 15, 2031. They can be converted at an initial rate of 1.5336 shares per $1,000 principal amount, equal to an initial conversion price of about $652.06 per share. That conversion price is well above Axon’s last reported stock price of $442.08, implying a premium of about 47.5%.
Axon’s capped call transactions were set with a cap price of $1,049.94 per share, which is 137.5% above the September 15 closing price. The company said the structure is intended to reduce dilution from future conversions.
If the notes are converted, repurchased, or redeemed under certain conditions, Axon can settle with cash, shares, or a combination of both. The company can begin redeeming the notes for cash on or after September 20, 2029, if its stock trades at least 130% of the conversion price for the required period. The holder repurchase option arrives on March 20, 2031. Following these announcements, the company's shares moved -0.15%, and are now trading at a price of $447.105. Check out the company's full 8-K submission here.
