Item 8.01. OTHER EVENTS
On July 20, 2021, VMware, Inc. ("VMware") priced its offering of $6.0 billion
aggregate principal amount of senior notes, consisting of its 0.600% Senior
Notes due 2023 (the "2023 notes") in an aggregate principal amount of
$1,000,000,000, 1.000% Senior Notes due 2024 (the "2024 notes") in an aggregate
principal amount of $1,250,000,000, 1.400% Senior Notes due 2026 (the "2026
notes") in an aggregate principal amount of $1,500,000,000, 1.800% Senior Notes
due 2028 (the "2028 notes") in an aggregate principal amount of $750,000,000,
and 2.200% Senior Notes due 2031 (the "2031 notes" and together with the 2023
notes, the 2024 notes, the 2026 notes and the 2028 notes, collectively, the
"notes") in an aggregate principal amount of $1,500,000,000. The net proceeds
from the sale of the notes are expected to be used to fund a portion of the
$11.5 to $12.0 billion cash dividend to be paid, pro rata, to each of the
holders of VMware's Class A common stock and Class B common stock in connection
with the spin-off of VMware from Dell Technologies, Inc. ("Dell") pursuant to
the terms of a Separation and Distribution Agreement entered into with Dell on
April 14, 2021 and, to the extent any proceeds remain, for general corporate
purposes. The offering is not conditioned upon the consummation of the spin-off,
but in the event that the closing of the spin-off has not occurred on or prior
to the earlier of (i) (x) April 28, 2022 or (y) if the Separation and
Distribution Agreement is amended on or prior to April 28, 2022 to extend the
date by which the spin-off must be consummated to a date later than April 28,
2022, the earlier of such extended date and July 28, 2022 and (ii) the date the
Separation and Distribution Agreement is terminated, VMware will be required to
redeem all outstanding 2023 notes, 2024 notes, 2028 notes and 2031 notes at a
special mandatory redemption price equal to 101% of the aggregate principal
amount of notes being redeemed, plus accrued and unpaid interest, if any, to,
but not including, the date of such special mandatory redemption. The 2026 notes
are not subject to the special mandatory redemption, and, if the spin-off is not
consummated, VMware expects to use the net proceeds thereof for general
corporate purposes, which may include debt repayment. The offering of the notes
was registered under VMware's registration statement on Form S-3 (No.
333-219940) filed with the Securities and Exchange Commission on March 27, 2020.
Settlement of the notes is expected to occur on August 2, 2021.
VMware agreed to sell the notes pursuant to the Underwriting Agreement, dated as
of July 20, 2021 (the "Underwriting Agreement"), by and among Barclays Capital
Inc., BofA Securities, Inc., Citigroup Global Markets Inc. and J.P. Morgan
Securities LLC, as the representatives for the several underwriters. A copy of
the Underwriting Agreement is filed as Exhibit 1.1 hereto. The foregoing summary
does not purport to be complete and is qualified in its entirety by reference to
the Underwriting Agreement.
The underwriters and their respective affiliates are full service financial
institutions engaged in various activities, which may include securities
trading, commercial and investment banking, financial advisory, investment
management, principal investment, hedging, financing and brokerage activities.
Some of the underwriters and their affiliates may engage in various financial
advisory, investment banking and other commercial dealings in the ordinary
course of business with VMware or its affiliates. They have received, or may in
the future receive, customary fees and commissions for these transactions.
Certain of the underwriters or their affiliates are expected to be lenders or
agents to VMware under the expected revolving credit facility and term loan
credit facilities VMware intends to enter into, and such underwriters or their
affiliates may receive customary fees for those transactions.
This Item 8.01 contains forward-looking statements. These forward-looking
statements are subject to the safe harbor provisions created by the Private
Securities Litigation Reform Act of 1995. Actual results could differ materially
from those projected in the forward-looking statements as a result of certain
risk factors, including (1) successful completion of the offering, (2) future
plans with respect to Dell's ownership interest in VMware, including the
proposed spin-off of its ownership to Dell stockholders and the related special
dividend to be paid by VMware and the sources of funding for such special
dividend and the commercial framework for our future relationship with Dell,
(3) fluctuations and volatility in VMware's stock price, (4) the impact of
macroeconomic conditions on customer demand, (5) change in VMware's financial
condition, (6) changes in business opportunities and priorities that could cause
VMware to consider alternative uses of cash, plans for, timing of and
anticipated impacts and benefits of corporate transactions, acquisitions, stock
repurchases and investment activities, and (7) the level of proceeds from
employee stock option exercises and VMware's employee stock purchase plan. These
forward-looking statements are based on current expectations and are subject to
uncertainties and changes in condition, significance, value and effect as well
as other risks detailed in documents filed with the Securities and Exchange
Commission, including VMware's most recent reports on Form 10-K and
Form 10-Q and current reports on Form 8-K
--------------------------------------------------------------------------------
that VMware may file from time to time, which could cause actual results to vary
from expectations. VMware assumes no obligation to, and does not currently
intend to, update any such forward-looking statements after the date of this
release.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
Exhibit
Number Description of Exhibit
1.1 Underwriting Agreement, dated July 20, 2021 by and between VMware,
Inc. and Barclays Capital Inc., BofA Securities, Inc., Citigroup
Global Markets Inc. and J.P. Morgan Securities LLC, as representatives
for the several underwriters
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses