Silicon Slopes, UT – March 4, 2019 – Pluralsight, Inc. (NASDAQ: PS) today announced its intention to offer, subject to market conditions and other factors, $450 million aggregate principal amount of convertible senior notes due 2024 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”).  Pluralsight also expects to grant the initial purchasers of the notes a 13-day option to purchase up to an additional $67.5 million aggregate principal amount of the notes.

The notes will be senior unsecured obligations of Pluralsight, and interest will be payable semi-annually in arrears.  The notes will be convertible into cash, shares of Pluralsight’s Class A common stock (“Class A common stock”), or a combination thereof, at Pluralsight’s election.  The interest rate, initial conversion rate and other terms of the notes are to be determined upon pricing of the offering.

Pluralsight expects to use a portion of the net proceeds of the offering of the notes to pay the cost of the capped call transactions described below.  Pluralsight intends to provide the remainder of the net proceeds from the offering of the notes to Pluralsight Holdings, LLC or its subsidiaries to be used for working capital and other general corporate purposes, as well as the acquisition of, or investment in, complementary products, technologies, solutions, or businesses, although Pluralsight has no present commitments or agreements to enter into any acquisitions or investments as of the date of this press release.

In connection with the pricing of the notes, Pluralsight expects to enter into capped call transactions with one or more of the initial purchasers or their respective affiliates and/or other financial institutions (the “counterparties”).  The capped call transactions are expected to offset the potential dilution to the Class A common stock upon any conversion of notes and/or offset any cash payments Pluralsight is required to make in excess of the principal amount of converted notes, as the case may be, with such offset subject to a cap.  If the initial purchasers exercise their option to purchase additional notes, Pluralsight expects to use a portion of the proceeds from the sale of the additional notes to enter into additional capped call transactions with the counterparties.

Pluralsight expects that, in connection with establishing their initial hedge of the capped call transactions, the counterparties or their respective affiliates will purchase shares of the Class A common stock and/or enter into various derivative transactions with respect to the Class A common stock concurrently with, or shortly after, the pricing of the notes, including with certain investors in the notes.  These activities could increase (or reduce the size of any decrease in) the market price of the Class A common stock or the notes at that time.  In addition, the counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Class A common stock and/or purchasing or selling shares of the Class A common stock or other securities of Pluralsight in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during any observation period relating to a conversion of the notes).  This activity could also cause or prevent an increase or a decrease in the market price of the Class A common stock or the notes, which could affect the ability of noteholders to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of the notes, could affect the number of shares of Class A common stock and value of the consideration that noteholders will receive upon conversion of the notes.

Concurrently with the offering of notes, certain selling stockholders of Pluralsight are offering approximately 13,558,464 shares of Pluralsight’s Class A common stock in an underwritten public offering.  Certain selling stockholders also intend to grant the underwriters a 30-day option to purchase up to an additional 2,033,770 shares of Pluralsight’s Class A common stock. The offering of notes is not contingent upon the concurrent public offering of Class A common stock, and the concurrent public offering of Class A common stock is not contingent upon the offering of notes.

This announcement is neither an offer to sell nor a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.  The notes will be offered to qualified institutional buyers pursuant to Rule 144A under the Act.  The notes and the shares of Class A common stock issuable upon conversion of the notes, if any, have not been, and will not be, registered under the Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements.