By Angela McDaniels
Tacoma, Wash., Jan. 11 – Veeco Instruments Inc. priced an upsized $300 million of 2.7% convertible senior notes due 2023 at par with a $45 million greenshoe after the market close on Wednesday, according to a company news release.
The conversion price is a 44% premium to Wednesday’s closing share price.
The issue was increased from $200 million, and the greenshoe was upsized from $30 million.
The deal came toward the rich end of talk for a yield of 2.625% to 3.125% and richer than talk for a conversion premium of 37.5% to 42.5%.
Barclays and Wells Fargo Securities LLC are the joint bookrunners.
Conversions will be settled with cash, common stock, or a combination, at the company’s option.
The notes have contingent conversion with a 130% threshold until Oct. 15, 2022 and are freely convertible from that date onwards.
The company can call the issue for cash after Jan. 20, 2021 if the stock price hits a 130% price hurdle.
Upon a fundamental change, holders can require the company to repurchase the debt at par plus accrued interest.
Proceeds will be used to fund potential acquisitions, to repurchase shares and for other general corporate purposes.
Veeco is a Plainview, N.Y.-based producer of process equipment solutions that enable the manufacture of LEDs, power electronics, hard drives, MEMS and wireless chips.
| Issuer: | Veeco Instruments Inc.
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| Issue: | Convertible senior notes
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| Amount: | $300 million, increased from $200 million
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| Greenshoe: | $45 million, increased from $30 million
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| Maturity: | Jan. 15, 2023
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| Bookrunners: | Barclays, Wells Fargo Securities LLC
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| Coupon: | 2.7%
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| Price: | Par
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| Yield: | 2.7%
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| Conversion premium: | 44%
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| Conversion price: | $40.03
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| Conversion ratio: | 24.98
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| Call option: | From Jan. 20, 2021 at par subject to 130% price hurdle
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| Put option: | Upon a fundamental change
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| Contingent conversion: | Yes, 130% stock price hurdle
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| Pricing date: | Jan. 11, after close
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| Settlement date: | Jan. 18
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| Stock symbol: | Nasdaq: VECO
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| Stock price: | $27.80 at close on Jan. 11
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| Market capitalization: | $1.2 billion
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