Common stock offered by us | 20,000,000 shares (increased from 17,000,000 shares) | |
Common stock offered by the selling stockholders | 5,000,000 (reduced from 25,000,000 shares). The amount to be sold by the selling stockholders was determined based on estimated tax obligations related to the conversion of the accrued and unpaid dividends on their shares of Class A Stock. | |
Common stock to be outstanding after this offering | 304,942,149 (308,692,149 if the underwriters’ exercise their option to purchase additional shares). We intend to convert all outstanding shares of Class A Stock and all accrued and unpaid dividends on the Class A Stock based on a conversion price equal to the greater of the initial public offering price per share of our common stock in this offering or $19.00. | |
Underwriters’ option to purchase additional shares from us | 3,750,000 (reduced from 6,300,000), all of which will come from us | |
Offering price range per share | $15.00 - $16.00 | |
Use of proceeds | We estimate that our net proceeds from this offering will be approximately $290.3 million (or approximately $345.5 million if the underwriters' option to purchase additional shares is exercised in full), assuming an initial public offering price of $15.50 per share (the midpoint of the estimated price range set forth on the cover page of the Preliminary Prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. The principal purposes of this offering are to increase our financial flexibility, create a public market for our common stock and enable access to the public equity markets for us and our stockholders. We intend to use the net proceeds from this offering to repay the borrowings outstanding under our second lien term loan. If there were to be excess proceeds, we would use such proceeds for general corporate purposes, including working capital, capital expenditures and continued investments in our growth strategies described in “Business—Growth Strategies.” We may also use any such excess proceeds to acquire or invest in complementary businesses, products, services or technologies. We do not have agreements or commitments for any acquisitions or investments at this time. We will not receive any of the proceeds from the sale of the shares being offered by the selling stockholders. |
Dilution | After giving effect to our sale in this offering of 20,000,000 shares of our common stock at an assumed initial offering price of $15.50 per share (the midpoint of the estimated price range set forth on the cover page of the Preliminary Prospectus) and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2018 would have been $(1.1) billion, or $(3.64) per share. This represents an immediate increase in pro forma net tangible book value of $9.74 per share to our existing stockholders and an immediate dilution in pro forma net tangible book value of $19.14 per share to investors purchasing shares of our common stock in this offering. If the underwriters’ option to purchase additional shares is exercised in full, the pro forma as adjusted net tangible book value per share of our common stock immediately after the completion of this offering would be $(3.40) per share, and the dilution in pro forma net tangible book value per share to investors purchasing shares of our common stock in this offering would be $18.90 per share. |
• | 3,204,400 shares of common stock issuable upon the exercise of options outstanding as of September 30, 2018, having a weighted average exercise price of $1.66 per share; |
• | 497,833 shares of common stock reserved for issuance under the SolarWinds Corporation Equity Plan; |
• | 30,000,000 shares of common stock reserved for issuance under the SolarWinds Corporation 2018 Equity Incentive Plan, which has been adopted in connection with this offering and under which we intend to grant $109.8 million of equity awards based on the initial public offering price per share of our common stock in this offering, which would result in our granting equity awards with respect to 7,086,452 shares of common stock assuming an initial public offering price of $15.50 per share (the midpoint of the estimated price range set forth on the cover page of the Preliminary Prospectus); and |
• | 3,750,000 shares of common stock reserved for issuance under the SolarWinds Corporation 2018 Employee Stock Purchase Plan. |
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