HubSpot Announces Private Offering of $300 Million of Convertible Senior Notes

5/3/17

HubSpot, Inc. (NYSE: HUBS) today announced its intention to offer, subject to market conditions and other factors, $300 million aggregate principal amount of Convertible Senior Notes due 2022 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. HubSpot also expects to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $50 million aggregate principal amount of the notes solely to cover over-allotments, if any.

The notes will be senior, unsecured obligations of HubSpot, and interest will be payable semi-annually in arrears. The notes will be convertible into cash, shares of HubSpot's common stock or a combination thereof, at HubSpot's election. The interest rate, conversion rate and other terms of the notes are to be determined upon pricing of the offering.

In connection with the pricing of the notes, HubSpot expects to enter into privately negotiated convertible note hedge transactions with respect to its common stock with one or more of the initial purchasers of the notes or their affiliates or other financial institutions (the "option counterparties"). The convertible note hedge transactions are expected generally to reduce potential dilution to our common stock upon conversion of any notes and/or offset any potential cash payments HubSpot is required to make in excess of the principal amount of converted notes, as the case may be. HubSpot also expects to enter into privately negotiated warrant transactions with the option counterparties pursuant to which HubSpot will sell warrants for the purchase of its common stock. However, the warrant transactions could separately have a dilutive effect to the extent that the market value per share of the common stock exceeds the strike price of the warrants. If the initial purchasers exercise their over-allotment option, HubSpot expects to enter into additional convertible note hedge transactions and additional warrant transactions with the option counterparties.

HubSpot expects that, in connection with establishing their initial hedges of the convertible note hedge and warrant transactions, the option counterparties or their respective affiliates will purchase shares of HubSpot's common stock and/or enter into various derivative transactions with respect to the common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of the common stock or the notes at that time. In addition, HubSpot expects that the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the common stock and/or purchasing or selling the common stock or other securities of HubSpot in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so following a conversion of the notes or during any observation period related to a conversion of notes). This activity could also cause a decrease or avoid an increase in the market price of the common stock or the notes, which could affect the ability of noteholders to convert the notes and, to the extent the activity occurs following a conversion or during any observation period related to a conversion of notes, it could affect the amount and value of the consideration that noteholders will receive upon conversion of the notes.

HubSpot expects to use a portion of the net proceeds of the offering of the notes to pay the net cost of the convertible note hedge transactions described above (after such cost is partially offset by the proceeds to HubSpot of the warrant transactions described above), and to use the remainder of the net proceeds from the offering of notes for general corporate purposes.

About HubSpot

HubSpot is a leading inbound marketing and sales platform. Over 31,000 total customers in over 90 countries use HubSpot's award-winning software, services, and support to create an inbound experience that will attract, engage, and delight customers.

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