Advanced Energy Industries, Inc. (Nasdaq: AEIS), a global leader
in highly engineered, precision power conversion, measurement, and
control solutions, announced today the closing of its previously
announced private offering of $575 million aggregate principal
amount of 2.50% Convertible Senior Notes due 2028 (the “notes”),
which amount includes the full exercise of the initial purchasers’
option to purchase an additional $75 million aggregate principal
amount of the notes.
Advanced Energy received net proceeds from the offering of the
notes of approximately $561.2 million after deducting the initial
purchasers’ discounts and after deducting offering expenses payable
by Advanced Energy. Advanced Energy intends to use the net proceeds
from the offering for one or more of the following: (i) to fund
plans for future growth, which may include strategic acquisitions,
(ii) to opportunistically repay existing outstanding indebtedness,
(iii) to repurchase additional common stock as part of our existing
opportunistic share repurchase plan, or (iv) for general corporate
purposes.
In addition, Advanced Energy used approximately $40.1 million of
the net proceeds from the offering to enter into convertible note
hedge transactions described below (after such cost was partially
offset by the proceeds to us from the sale by us of the warrant
transactions to the option counterparties, with a warrant strike
price of approximately $179.76 per share subject to certain
adjustments), and used approximately $40.0 million of the net
proceeds from the offering to repurchase 378,286 shares of Advanced
Energy common stock from purchasers of the notes in this offering.
Including cash used in these two items, the total final proceeds
were approximately $481.0 million.
The notes are Advanced Energy’s senior unsecured obligations,
bear interest at a rate of 2.50% per year, and will mature on
September 15, 2028, unless earlier repurchased, redeemed or
converted. The initial conversion rate is 7.2747 shares of common
stock per $1,000 principal amount of notes, which is equivalent to
an initial conversion price of approximately $137.46 per share,
representing a premium of approximately 30% over the closing price
of the common stock of $105.74 per share on September 7, 2023.
Advanced Energy will satisfy any conversion elections by paying
cash up to the aggregate principal amount of the notes to be
converted, and paying or delivering, as the case may be, cash,
shares of common stock or a combination of cash and shares of
common stock, at Advanced Energy’s election, in respect of the
remainder, if any, of its conversion obligation in excess of the
aggregate principal amount of the notes to be converted.
Advanced Energy may redeem for cash all or any portion of the
notes, at its option at any time and from time to time, on or after
September 20, 2026 if the last reported sale price of Advanced
Energy’s common stock has been at least 130% of the conversion
price then in effect for at least 20 trading days (whether or not
consecutive) during any 30 consecutive trading-day period
(including the last trading day of such period) ending on, and
including, the trading day immediately preceding the date on which
Advanced Energy provides the related notice of redemption at a
redemption price equal to 100% of the principal amount of the notes
to be redeemed, plus accrued and unpaid interest, if any, to, but
excluding, the redemption date. If Advanced Energy undergoes a
fundamental change (as defined in the indenture governing the
notes), holders may require Advanced Energy to repurchase for cash
all or part of their notes at a repurchase price equal to 100% of
the principal amount of the notes to be repurchased, plus accrued
and unpaid interest, if any, to, but excluding, the fundamental
change repurchase date.
In connection with the pricing of the notes and the exercise of
the initial purchasers’ option to purchase additional notes,
Advanced Energy entered into privately negotiated convertible note
hedge transactions with one or more of the initial purchasers
and/or their respective affiliates and/or other financial
institutions (the “option counterparties”). The convertible note
hedge transactions cover, subject to customary anti-dilution
adjustments, the same number of shares of common stock that
initially underlie the notes. Advanced Energy also entered into
warrant transactions with the option counterparties relating to the
same number of shares of common stock, subject to customary
anti-dilution adjustments. The convertible note hedge transactions
are expected generally to reduce potential dilution to Advanced
Energy’s common stock upon any conversion of notes and/or offset
any cash payments Advanced Energy is required to make in excess of
the principal amount of converted notes, as the case may be.
However, the warrant transactions could separately have a dilutive
effect to the extent that the market value per share of Advanced
Energy’s common stock exceeds the strike price of the warrants. The
strike price of the warrant transactions is initially approximately
$179.76 per share, which represents a premium of 70% over the
closing price of Advanced Energy’s common stock of $105.74 per
share on September 7, 2023 and is subject to certain adjustments
under the terms of the warrant transactions.
The notes were offered only to persons reasonably believed to be
qualified institutional buyers in accordance with Rule 144A under
the Securities Act of 1933, as amended (the “Securities Act”). The
notes and any shares of the common stock issuable upon conversion
of the notes have not been registered under the Securities Act or
under any U.S. state securities laws or in any other jurisdiction
and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any of these securities nor shall
there be any sale of these securities in any state or jurisdiction
in which such an offer, solicitation or sale would be unlawful
prior to the registration or qualification under the securities
laws of any such state or jurisdiction.
About Advanced Energy
Advanced Energy (Nasdaq: AEIS) is a global leader in the design
and manufacture of highly engineered, precision power conversion,
measurement and control solutions for mission-critical applications
and processes. Advanced Energy’s power solutions enable customer
innovation in complex applications for a wide range of industries
including semiconductor equipment, industrial production, medical
and life sciences, data center computing, networking and
telecommunications. With engineering know-how and responsive
service and support for customers around the globe, the company
builds collaborative partnerships to meet technology advances,
propels growth of its customers and innovates the future of power.
Advanced Energy has devoted four decades to perfecting power. It is
headquartered in Denver, Colorado, USA.
Advanced Energy | Precision. Power. Performance. Trust.
Forward-Looking Statements
This release may contain, in addition to historical information,
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Statements in this
release that are not historical information are forward-looking
statements. For example, statements relating to our beliefs,
expectations and plans, particularly statements about the extent,
and potential effects, of convertible note hedge and warrant
transactions, the potential dilution to the common stock, the
conversion price for the notes, and the expected use of the
proceeds from the sale of the notes, are forward-looking
statements. The inclusion of words such as "anticipate," "expect,"
"estimate," "can," "may," "might," "continue," "enables," "plan,"
"intend," "should," "could," "would," "likely," "potential," or
"believe," as well as statements that events or circumstances
"will" occur or continue, indicate forward-looking statements.
Forward-looking statements are subject to known and unknown risks
and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements. Such
risks and uncertainties are described in Advanced Energy’s Form
10-K, Forms 10-Q and other reports and statements filed with the
Securities and Exchange Commission (the “SEC”). These reports and
statements are available on the SEC’s website at www.sec.gov.
Copies may also be obtained from Advanced Energy’s investor
relations page at ir.advancedenergy.com or by contacting Advanced
Energy’s investor relations at 970-407-6555. Forward-looking
statements are made and based on information available to us on the
date of this press release, and readers are cautioned to not place
undue reliance on forward-looking statements. We assume no
obligation to update the information in this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230912917065/en/
Andrew Huang Advanced Energy Industries, Inc. 970-407-6555
ir@aei.com
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