DigitalOcean plans $500M note repurchase via stock offering

DigitalOcean Holdings, Inc. (NYSE: DOCN) announced plans to repurchase up to $500.0 million in principal amount of its 0.00% convertible senior notes due 2030, funding the transaction through a concurrent registered direct offering of common stock.

The company intends to enter into privately negotiated transactions with a limited number of noteholders to repurchase the 2030 convertible notes for cash. The repurchase price will be based on a volume-weighted average price of DigitalOcean's common stock measured over the trading day expected to be July 15, 2026. The transactions are expected to close on July 23, 2026, subject to customary closing conditions.

The number of shares to be sold in the registered direct offering, and the price per share, will be determined at pricing. DigitalOcean said repurchased notes will be retired, and shares issued in the offering are expected to be largely offset by shares underlying the repurchased notes. The company also stated it intends to use its existing share repurchase authorization to buy back any incremental shares issued to eliminate dilution.

According to the company's statement, the transaction is expected to reduce net leverage with minimal change in cash or shares outstanding. DigitalOcean acknowledged that hedging or unwinding activities by participating noteholders could affect the trading price of its common stock, though it said it cannot predict the magnitude of such market activity.

The registered direct offering is being made pursuant to an effective shelf registration statement on file with the Securities and Exchange Commission. J. Wood Capital Advisors LLC is acting as financial advisor for the placement.

No assurance was given as to how many of the 2030 convertible notes will ultimately be repurchased or on what terms, as the repurchase is subject to closing conditions that may not be satisfied.

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