Rapid7 announces proposed privated offering of $250M of senior notes

Rapid7 intends to offer, subject to market conditions and other factors, $250 million aggregate principal amount of convertible senior notes due 2029 in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Rapid7 also intends to grant the initial purchasers of the notes an option to purchase up to an additional $37.5 million aggregate principal amount of notes. The notes will be general unsecured obligations of Rapid7 and will accrue interest payable semiannually in arrears. The notes will be convertible into cash, shares of Rapid7’s common stock or a combination of cash and shares of Rapid7’s common stock, at Rapid7’s election. The interest rate, initial conversion rate and other terms of the notes will be determined at the time of pricing of the offering. Rapid7 expects to use a portion of the net proceeds from the offering of the notes to repurchase a portion of its outstanding 2.25% Convertible Senior Notes due 2025 in one or more separate and privately negotiated transactions expected to be entered into concurrently with the pricing of the offering and to pay the cost of the capped call transactions described below. The terms of any repurchases of the 2025 notes are anticipated to be individually negotiated and will depend on several factors, including the market price of Rapid7’s common stock and the trading price of the 2025 notes at the time of such repurchases. Rapid7 expects to use the remainder of the net proceeds for general corporate purposes, which may include continued investment in its sales and marketing efforts, product development, general and administrative matters, and working capital. Rapid7 may also use a portion of the proceeds from this offering for acquisitions or strategic investments in complementary businesses or technologies, although it does not currently have any plans for any such acquisitions or investments.