Dynatrace prices $1.25B exchangeable senior notes due 2031

Dynatrace, Inc. (NYSE: DT) announced that its indirect wholly-owned subsidiary, Dynatrace LLC, priced a private placement of $1.25 billion in aggregate principal amount of 0.00% Exchangeable Senior Notes due 2031, according to a company statement.

The notes, offered to qualified institutional buyers under Rule 144A, are expected to settle on August 20, 2026, subject to customary closing conditions. Net proceeds are estimated at approximately $1.227 billion after deducting initial purchaser discounts and offering expenses, assuming no exercise of an overallotment option. The initial purchasers were granted an option to purchase up to an additional $187.5 million in notes.

The notes will mature on September 1, 2031, carry no regular interest, and are exchangeable at an initial rate of 15.5585 shares of Dynatrace common stock per $1,000 principal amount, equivalent to approximately $64.27 per share. That exchange price represents a 35% premium to the stock's last reported sale price of $47.61 on the New York Stock Exchange on August 17, 2026.

Dynatrace LLC plans to use approximately $145.9 million of net proceeds to fund exchangeable note hedge transactions, net of proceeds from related warrant transactions. An additional $134.7 million will be used to repurchase approximately 2.83 million shares of common stock at $47.61 per share in concurrent privately negotiated transactions. The remaining proceeds are designated for general corporate purposes.

In connection with the offering, the company entered into exchangeable note hedge transactions intended to reduce potential dilution upon note exchange. Dynatrace also entered into warrant transactions with an initial strike price of approximately $107.12 per share, representing a 125% premium to the August 17, 2026 closing price. The warrant transactions could have a dilutive effect if the common stock price exceeds the warrant strike price.

The notes have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent an applicable exemption from registration requirements.

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