Salesforce.com (CRM) announced that it intends to offer, subject to market and other conditions, $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.
Salesforce.com also said it expects to grant 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.
In connection with the offering of the notes, the company stated that it expects to enter into privately-negotiated convertible note hedge transactions with one or more of the initial purchasers and their affiliates and/or other financial institutions. Salesforce.com also expects to enter into privately-negotiated warrant transactions with the hedge counterparties.
The company said it 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, 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.
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