(Bloomberg) — Splunk Inc., an infrastructure software company, said private equity firm Silver Lake will invest $1 billion to help expand its business.

The investment disclosed Tuesday will be in the form of convertible senior notes, Splunk said in a statement. Some of the proceeds will also be used for a newly authorized share buyback program of as much as $1 billion.

Under terms of the deal, the notes will have an initial conversion price of $160 per share, representing a 30% premium to the volume-weighted average closing price of Splunk’s stock over 10 days as of Monday. The new buyback announced in connection with the investment is intended to offset the dilutive effect of the notes, Splunk said.

Splunk shares jumped 8.5% in early trading on the news.

Earlier this month Splunk gave an outlook for second-quarter annual recurring revenue that was below expectations. The company has been transitioning into cloud services over the past few years, a fast-growing and highly competitive market.

As part of the new investment, Kenneth Hao, chairman and managing partner of Silver Lake, will join Splunk’s board.

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