Advanced Energy Industries, Inc. (Nasdaq: AEIS), a global leader
in highly engineered, precision power conversion, measurement, and
control solutions, announced today that it intends to offer,
subject to market and other conditions, $500 million aggregate
principal amount of Convertible Senior Notes due 2028 (the “notes”)
in a private offering. The notes will be 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”). Advanced Energy also expects to
grant to the initial purchasers of the notes an option to purchase,
up to an additional $75 million aggregate principal amount of the
notes.
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 intends to use the net proceeds
from the offering (i) to enter into 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”) (after such cost is partially offset
by the proceeds to us from the sale by us of the warrant
transactions to the option counterparties as described below), and
(ii) to repurchase up to $60 million of Advanced Energy common
stock, which was authorized by Advanced Energy’s board of
directors, concurrently with this offering in privately negotiated
transactions through one of the initial purchasers or its affiliate
from purchasers of the notes in the offering. Such repurchases
could affect the market price of Advanced Energy’s common stock
concurrently with, or shortly after, the pricing of the notes, and
could result in a higher effective conversion price for the notes.
If the initial purchasers exercise their option to purchase
additional notes, Advanced Energy expects to enter into additional
convertible note hedge transactions and warrant transactions, and
intends to use a portion of the net proceeds from the sale of any
such additional notes to pay the costs of such additional
convertible note hedge transactions (which would be partially
offset by the proceeds to Advanced Energy from the sale of
additional warrant transactions).
The notes will be Advanced Energy’s senior unsecured obligations
and will rank senior in right of payment to any of its indebtedness
that is expressly subordinated in right of payment to the notes;
equal in right of payment to any of its indebtedness that is not so
subordinated; effectively junior in right of payment to any of its
secured indebtedness to the extent of the value of the assets
securing such indebtedness; and structurally junior to all
indebtedness and other liabilities (including trade payables) of
its subsidiaries. The notes are expected to pay interest
semiannually in arrears and to mature on September 15, 2028, unless
earlier repurchased, redeemed or converted. The initial conversion
rate and other terms of the notes will be determined by
negotiations between Advanced Energy and the initial purchasers of
the notes.
In connection with the pricing of the notes, Advanced Energy
expects to enter into privately negotiated convertible note hedge
transactions with the option counterparties. The convertible note
hedge transactions will cover, subject to customary anti-dilution
adjustments, the same number of shares of common stock that
initially underlie the notes.
Advanced Energy also expects to enter 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.
In connection with establishing their initial hedges of the
convertible note hedge and warrant transactions, the option
counterparties, or their respective affiliates, expect to purchase
shares of the common stock and/or enter into various derivative
transactions with respect to the common stock concurrently with or
shortly after the pricing of the notes. These activities could have
the effect of increasing, or reducing the size of any decline in,
the market price of the common stock or the notes at that time. In
addition, the option counterparties, or their respective
affiliates, may modify their hedge positions by entering into or
unwinding various derivative transactions with respect to the
common stock and/or by purchasing or selling the common stock or
other securities of Advanced Energy in secondary market
transactions following the pricing of the notes and prior to the
maturity of the notes, and are likely to do so during any
observation period related to a conversion of notes. The effect, if
any, of these activities on the market price of the common stock or
the notes will depend in part on market conditions and cannot be
ascertained at this time, but any of these activities could cause
or prevent an increase or decline in the market price of the common
stock or the notes, which could affect holders’ ability to convert
the notes and, to the extent the activity occurs during any
observation period related to a conversion of notes, it could
affect the number and value of shares of the common stock, if any,
that holders will receive upon conversion of the notes.
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
report that are not historical information are forward-looking
statements. For example, statements relating to our beliefs,
expectations and plans, particularly statements about the expected
closing of the transactions, 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20230906434293/en/
Andrew Huang Advanced Energy Industries, Inc. 970-407-6555
ir@aei.com
Advanced Energy Industries (NASDAQ:AEIS)
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