Penguin Solutions intends to offer $650 million in convertible senior notes due in 2031.
Initial purchasers hold an option to buy an additional $100 million in notes.
The offering targets qualified institutional buyers to enhance the company's capital structure.
Penguin will concurrently exchange existing 2029 and 2030 convertible notes for cash and common stock.
Net proceeds will repay $100 million outstanding under a credit agreement.
The company will also fund capped call transactions to reduce potential shareholder dilution.
Shares declined in after-hours trading following the announcement.