InterDigital greenshoe exercised; convertibles lifted to $230 million

By Devika Patel

Knoxville, Tenn., April 4 - Underwriters for InterDigital Inc.'s offering of 2.5% five-year convertible senior notes exercised their over-allotment option in full for $30 million more of the convertibles, increasing the size of the issue to $230 million, the company said in an 8-K filed Monday with the Securities and Exchange Commission.

As previously reported, the company sold the notes at par on March 29 after the close in a Rule 144A offering via bookrunner Barclays Capital Inc.

The convertibles have an initial conversion premium of 32.5% and an initial $43.51 conversion price, which equals a conversion ratio of 17.3458. There is a contingent conversion at a price trigger of 130%.

In connection with the offering, InterDigital entered into convertible note hedge and warrant transactions with affiliates of the initial purchaser. Based on the strike price of the warrant transaction at about $66.35, the conversion premium from the issuer's perspective was raised to 52.5%.

A portion of deal proceeds and proceeds from the warrants sale will be used to fund the call spread. Remaining proceeds will be used for general corporate purposes, including acquisitions of intellectual property-related assets or businesses, for capital expenditures and for working capital.

King of Prussia, Pa.-based InterDigital develops digital wireless technologies for use in cellular and wireless related products. It also develops services for enhancing bandwidth availability and network capacity, wireless security and seamless connectivity, and mobility across networks and devices.

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