SentinelOne plans to offer $1.25 billion in convertible senior notes due 2031 through a private placement to qualified institutional buyers. Initial purchasers will have a 13-day option to buy up to an additional $187.5 million in notes.
The notes will not bear regular interest and will be senior unsecured obligations. SentinelOne plans to use some of the proceeds for capped call transactions intended to reduce potential shareholder dilution. It also plans to repurchase up to $150 million of its stock and use the remaining proceeds for general corporate purposes, which may include future acquisitions.
SentinelOne shares traded lower after the announcement amid concerns about potential dilution. The company also disclosed discussions for a separate $400 million secured revolving credit facility, which is not contingent on the notes offering.