Form 4: Bain Capital Converts $817.6 Million in Nutanix Convertible Notes into Class A Common Stock

David Humphrey, a director of Nutanix, reports the conversion of $817.6 million in convertible notes held by BCPE Nucleon, an affiliate of Bain Capital, into 16,854,032 shares of Class A common stock.

Summary

• On July 22, 2024, BCPE Nucleon (DE) SPV, LP, an entity affiliated with Bain Capital, converted $817,632,828 aggregate principal amount of 2.50% convertible notes due 2026 into 16,854,032 shares of Nutanix Class A common stock.
• The conversion was settled with $817,632,828 in cash on July 1, 2024, and the shares were issued upon the expiration of the Hart-Scott-Rodino Antitrust Improvement Act waiting period on July 22, 2024.
• The conversion price was based on a 25-trading day trailing volume-weighted average price of approximately $65.51 per share.
• David Humphrey, a Partner of Bain Capital Investors, LLC, may be deemed to share voting and dispositive power with respect to the securities held by BCPE Nucleon.
• Humphrey also directly owns 37,100 shares of Class A Common Stock, including 6,088 unvested restricted stock units.
• The convertible notes mature on September 15, 2026, subject to earlier redemption, repurchase, or conversion.

Sentiment

Score: 7

Explanation: The conversion of convertible notes into equity is generally a positive sign, indicating investor confidence and reducing debt. However, the dilution effect on existing shareholders needs to be considered.

Positives

• The conversion of the notes eliminates a significant debt obligation for Nutanix.
• Bain Capital's continued investment signals confidence in Nutanix's future prospects.

Future Outlook

The convertible notes mature on September 15, 2026, subject to earlier redemption, repurchase or conversion in accordance with their terms.

Industry Context

This conversion reflects a significant financial transaction involving a major investor in the cloud computing space. Such conversions are often indicative of the investor's long-term confidence in the company's prospects, but can also impact the company's capital structure and stock price.

Comparison to Industry Standards

• Similar convertible note transactions have been observed in the tech industry, such as Silver Lake's investment in Dell Technologies and Apollo's investment in Yahoo.
• The conversion price of approximately $65.51 per share reflects the market's valuation of Nutanix at the time of conversion.
• The terms of the convertible notes, including the interest rate and maturity date, are typical for such instruments in the current market environment.

Stakeholder Impact

• Shareholders may experience dilution due to the issuance of new shares.
• The company's debt burden is reduced, potentially improving its financial stability.
• Employees may view Bain Capital's continued investment as a positive sign for the company's future.

Key Dates