PROS Holdings, Inc. Announces $125 Million Private Offering of Convertible Senior Notes

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    HOUSTON–(BUSINESS WIRE)–PROS Holdings, Inc. (NYSE: PRO) today announced that it intends to
    offer, subject to market conditions and other factors, $125 million
    aggregate principal amount of convertible senior notes due 2024 in a
    private placement to qualified institutional buyers pursuant to Rule
    144A under the Securities Act of 1933. PROS expects to grant an option
    to the initial purchasers to purchase up to an additional $18,750,000
    aggregate principal amount of convertible notes.

    The convertible notes will be unsecured, unsubordinated obligations of
    PROS and are expected to pay interest semiannually. The convertible
    notes will mature on May 15, 2024, unless converted, redeemed or
    repurchased in accordance with their terms prior to such date. Prior to
    February 15, 2024, the convertible notes will be convertible only upon
    the satisfaction of certain conditions and during certain periods, and
    thereafter at any time prior to the close of business on the second
    scheduled trading day immediately preceding the maturity date regardless
    of these conditions. The convertible notes will be convertible into
    cash, shares of PROS’ common stock or a combination of cash and shares
    of PROS’ common stock, at PROS’ election. The initial conversion rate,
    interest rate and other terms of the convertible notes will be
    determined at the time of pricing in negotiations with the initial
    purchasers of the convertible notes.

    In connection with the offering, PROS intends to enter into privately
    negotiated capped call transactions with option counterparties that may
    include one or more of the initial purchasers or their affiliates. The
    capped call transactions will cover, subject to anti-dilution
    adjustments, the number of shares of common stock underlying the
    convertible notes sold in the offering. If the initial purchasers
    exercise their option to purchase additional notes, PROS may enter into
    additional capped call transactions with the option counterparties. The
    capped call transactions are generally expected to reduce potential
    dilution to PROS’ common stock upon conversion of the convertible notes
    and/or offset any cash payments PROS is required to make in excess of
    the principal amount of converted notes, as the case may be.

    PROS intends to use a portion of the net proceeds of the offering to pay
    the cost of the capped call transactions and to use a portion of the
    remainder of the net proceeds from the offering to enter into separate
    transactions to repurchase, exchange or otherwise retire a portion of
    PROS’ outstanding 2.0% Convertible Senior Notes due 2019 from time to
    time (including concurrently with this offering). The consideration for
    any such transactions may include cash, shares of PROS’ common stock or
    a combination of cash and shares of PROS’ common stock. The terms of any
    separate transactions to repurchase, exchange or otherwise retire
    outstanding 2019 notes are expected to be individually negotiated and
    will depend on factors including the market price of PROS’ common stock
    and the trading price of the 2019 notes at the time of such
    transactions. PROS expects to use the remaining net proceeds from this
    offering for general corporate purposes, including working capital,
    capital expenditures, potential acquisitions and strategic transactions,
    and potentially additional repurchases of outstanding notes. If the
    initial purchasers exercise their option to purchase additional notes,
    PROS intends to use a portion of the net proceeds to fund the cost of
    entering into additional capped call transactions. Any remaining net
    proceeds from the sale of additional notes will be used for general
    corporate purposes.

    PROS has been advised that in connection with establishing their initial
    hedges of the capped call transactions, concurrently with or shortly
    after the pricing of the notes, the option counterparties or their
    respective affiliates may purchase shares of PROS’ common stock or other
    PROS securities or instruments and/or enter into various derivative
    transactions with respect to PROS’ common stock or other PROS securities
    or instruments. This activity could increase (or reduce the size of any
    decrease in) the market price of PROS’ common stock or the notes at that
    time. The option counterparties or their respective affiliates may
    subsequently modify their hedge positions. Additionally, in connection
    with any repurchase, exchange or retirement of 2019 notes, PROS may
    terminate all or a portion of the existing convertible note hedge and
    warrant transactions that PROS entered into when the 2019 notes were
    issued. In connection with any termination of PROS’ existing hedging
    transactions and the related unwinding of the existing hedge positions
    of the counterparties to such existing hedging transactions, such
    counterparties and/or their respective affiliates may sell shares of
    PROS’ common stock or other PROS securities or instruments in secondary
    market transactions, and/or unwind various derivative transactions with
    respect to PROS’ common stock or other PROS securities or instruments.
    These transactions could affect the market price of PROS’ common stock.

    This press release is neither an offer to sell nor a solicitation of an
    offer to buy the convertible notes or the shares of common stock
    issuable upon conversion of the convertible notes, if any, nor shall
    there be any sale of these securities in any state or jurisdiction in
    which such an offer, solicitation or sale would be unlawful prior to the
    registration or qualification under the securities laws of any such
    state or jurisdiction.

    The convertible notes and the shares of common stock issuable upon
    conversion of the convertible notes, if any, have not been registered
    under the Securities Act of 1933, or the securities laws of any other
    jurisdiction, and may not be offered or sold in the United States absent
    registration or an applicable exemption from registration requirements.

    Forward-looking Statements

    This press release contains “forward-looking statements” within the
    meaning of the Private Securities Litigation Reform Act of 1995
    regarding the planned offering, business strategies, market potential,
    future financial and operational performance and other matters. Words
    such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts,”
    “intends,” “plans,” “will,” “believes” and words and terms of similar
    substance used in connection with any discussion of future operating or
    financial performance identify forward-looking statements. These
    forward-looking statements are based on management’s current
    expectations and beliefs about future events and are inherently
    susceptible to uncertainty and changes in circumstances. Except as
    required by law, PROS is under no obligation to, and expressly disclaims
    any obligation to, update or alter any forward-looking statements
    whether as a result of such changes, new information, subsequent events
    or otherwise. With respect to the planned offering, such uncertainties
    and circumstances include whether PROS will offer the notes or
    consummate the offering; the anticipated terms of the notes and the use
    of the net proceeds from the offering; and whether the capped call
    transactions will become effective. Various factors could also adversely
    affect PROS’ operations, business or financial results in the future and
    cause PROS’ actual results to differ materially from those contained in
    the forward-looking statements, including those factors discussed in
    detail in the “Risk Factors” sections contained in PROS’ Annual Report
    on Form 10-K for the year ended December 31, 2018 (the “Annual Report”)
    and Quarterly Report on Form 10-Q for the three months ended March 31,
    2019 (“Quarterly Report”), filed with the Securities and Exchange
    Commission. In addition, PROS operates in a highly competitive, rapidly
    changing and technology-driven industry. This industry is affected by
    government regulation, economic, strategic, political and social
    conditions, technological developments and, particularly in view of new
    technologies, the continued ability to protect intellectual property
    rights. PROS’ actual results could differ materially from management’s
    expectations because of changes in such factors. Achieving PROS’
    business and financial objectives, including improved financial results
    and maintenance of a strong balance sheet and liquidity position, could
    be adversely affected by the factors discussed or referenced under the
    “Risk Factors” sections contained in the Annual Report and Quarterly
    Report as well as, among other things: (a) threats to the security of
    PROS’ or PROS’ customer’s data, (b) potential business or service
    disruptions from PROS’ third party data centers, cloud platform
    providers or other unrelated service providers, (c) evolving data
    privacy, cyber security and data localization laws and regulations, (d)
    PROS’ ability to manage its cloud operations, (e) PROS’ ability to
    migrate customers with on-premise software licenses to its latest cloud
    solutions; and (f) PROS’ ability to return to profitability following
    its transition to a cloud strategy.

    Contacts

    Media Contact:
    James Gerber
    617-960-9875
    [email protected]

    Investor Contact:
    PROS Investor Relations
    Shannon Tatz
    713-335-5932
    [email protected]