DocuSign Announces Proposed Private Placement of $400 Million of Convertible Senior Notes

SAN FRANCISCO, Sept. 11, 2018 /PRNewswire/ -- DocuSign, Inc. ("DocuSign") (Nasdaq: DOCU) today announced that it intends to offer, subject to market conditions and other factors, $400 million principal amount of Convertible Senior Notes due 2023 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). DocuSign also intends to grant the initial purchasers of the notes an option to purchase up to an additional $60 million principal amount of notes.

The notes will be senior unsecured obligations of DocuSign and will accrue interest payable semiannually in arrears. The notes will be convertible into cash, shares of DocuSign's common stock or a combination of cash and shares of DocuSign's common stock, at DocuSign's election. The interest rate, initial conversion rate, repurchase or redemption rights and other terms of the notes will be determined at the time of pricing of the offering.

DocuSign intends to use a portion of the net proceeds from the offering to pay the cost of the capped call transactions described below. DocuSign intends to use the remainder of the net proceeds for working capital and other general corporate purposes. DocuSign may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement its business, although it has no commitments to enter into any such acquisitions or investments at this time. If the initial purchasers exercise their option to purchase additional notes, DocuSign expects to use a portion of the net proceeds from the sale of the additional notes to enter into additional capped call transactions as described below. DocuSign intends to use the remainder of the net proceeds from the sale of the additional notes for working capital and other general corporate purposes.

In connection with the pricing of the notes, DocuSign expects to enter into capped call transactions with one or more of the initial purchasers or their respective affiliates and/or other financial institutions (the "option counterparties"). The capped call transactions are expected generally to offset the potential dilution to DocuSign's common stock upon any conversion of notes and/or offset any cash payments DocuSign is required to make in excess of the principal amount of converted notes, as the case may be, with such offset subject to a cap. If the initial purchasers exercise their option to purchase additional notes, DocuSign expects to enter into additional capped call transactions with the option counterparties.

In connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates may purchase shares of DocuSign's common stock and/or enter into various derivative transactions with respect to DocuSign's common stock concurrently with or shortly after the pricing of the notes, including with certain investors in the notes. This activity could increase (or reduce the size of any decrease in) the market price of DocuSign's common stock or the notes at that time.

In addition, DocuSign expects that the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to DocuSign's common stock and/or purchasing or selling DocuSign's common stock or other securities of DocuSign in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so on each exercise date for the capped call transactions, which are expected to occur during the 30 trading day period beginning on the 31st scheduled trading day prior to the maturity date of the notes). This activity could also cause or prevent an increase or a decrease in the market price of DocuSign's common stock or the notes, which could affect a noteholder's ability to convert its notes and, to the extent the activity occurs during any observation period related to a conversion of notes, this could affect the amount and value of the consideration that a noteholder will receive upon conversion of its notes.

Concurrently with the offering of notes, certain selling stockholders of DocuSign are offering 8,060,550 shares of DocuSign's common stock in an underwritten public offering. Such selling stockholders also intend to grant the underwriters a 30-day option to purchase up to an additional 1,209,082 shares of the DocuSign's common stock. The notes offering is not contingent upon the concurrent public offering of common stock, and the concurrent public offering of common stock is not contingent upon the notes offering.

Neither the notes, nor any shares of DocuSign's common stock issuable upon conversion of the notes, have been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.

This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation or sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About DocuSign

Founded in 2003, DocuSign helps organizations connect and automate how they prepare, sign, act-on, and manage agreements. As part of its cloud-based System of Agreement Platform, DocuSign offers eSignature—the market-leading way to sign electronically on practically any device, from almost anywhere, at any time. Today, more than 425,000 customers and hundreds of millions of users in over 180 countries use DocuSign to accelerate the process of doing business and simplify people's lives.

Investor Relations:
Annie Leschin
VP Investor Relations
415-489-1005
annie.leschin@docusign.com

Media Relations:
Adrian Wainwright
Head of Communications
media@docusign.com 

Forward-Looking Statements

This press release contains "forward-looking" statements that are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include statements concerning the proposed terms of the notes, the capped call transactions and the concurrent common stock offering, the completion, timing and size of the proposed offering of the notes, capped call transactions and concurrent common stock offering and the anticipated use of proceeds from the offering. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as "believe," "could," "expect," "intend," "may," "potential," "will," "would" or similar expressions and the negatives of those terms.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual events to differ from DocuSign's plans. These risks include, but are not limited to, market risks, trends and conditions, and those risks included in the section titled "Risk Factors" in DocuSign's Securities and Exchange Commission ("SEC") filings and reports, including its Quarterly Report on Form 10-Q for the quarter ended July 31, 2018 and other filings that DocuSign makes from time to time with the SEC, which are available on the SEC's website at www.sec.gov. In addition, forward-looking statements contained in this press release are based on assumptions that DocuSign believes to be reasonable as of this date. Except as required by law, DocuSign assumes no obligation to update these forward-looking statements as a result of new information, future events, changes in expectations or otherwise.

SOURCE DocuSign, Inc.