17 May 2023
Veeco proposes private offering of $200m of convertible senior notes
Epitaxial deposition and process equipment maker Veeco Instruments Inc of Plainview, NY, USA is to offer (subject to market and other conditions) $200m worth of convertible senior notes due 2029 in a private offering to persons reasonably believed to be qualified institutional buyers (in accordance with Rule 144A under the Securities Act of 1933, as amended). Veeco also expects to grant the initial purchasers a 30-day option to buy up to an additional $30m of the notes.
Veeco intends to use the net proceeds to fund the cash portion, if any, of any note exchanges and the remainder, if any, for general corporate purposes. If the initial purchasers exercise their option to buy additional notes, Veeco will use those net proceeds for general corporate purposes.
Contemporaneously with the pricing of the notes in the offering, Veeco expects to enter into one or more separate and individually negotiated transactions with one or more holders of its outstanding 3.50% convertible senior notes due 2025 and/or 3.75% convertible senior notes due 2027 to exchange a portion of the existing notes for cash, shares of Veeco’s common stock or a combination thereof on terms to be negotiated separately with each holder.
Veeco expects that holders who exchange their existing notes in any note exchange may enter into or unwind various derivatives with respect to Veeco’s common stock (including entering into derivatives with one or more of the initial purchasers in the offering of notes or their respective affiliates) and/or purchase or sell shares of Veeco’s common stock concurrently with or shortly after pricing of the notes in the offering. This activity could affect the market price of Veeco’s common stock and the initial conversion price of the notes in the offering. Veeco says that it cannot predict the magnitude of such market activity or the overall effect it will have on the price of the notes or Veeco’s common stock.
The notes will be Veeco’s senior unsecured obligations. They will mature on 1 June 2029, unless earlier redeemed, repurchased or converted. Veeco may not redeem the notes prior to 8 June 2026. On or after 8 June 2026, Veeco may redeem for cash all or a portion of the notes, at its election, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect on each of 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 Veeco provides notice of redemption. Veeco will settle any conversions of the notes 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 its common stock or a combination of cash and shares of common stock, at Veeco’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. The interest rate, initial conversion rate, and other terms of the notes will be determined by negotiations between Veeco and the initial purchasers of the notes.