2 July 2020
II-VI prices public offerings, upscaled from $750m to $800m
Engineered materials and optoelectronic component maker II-VI Inc of Saxonburg, PA, USA has announced the pricing of concurrent underwritten public offerings of (i) 9,302,235 shares of its common stock at $43 per share, for gross proceeds of about $400m (upscaled from the $350m announced on 30 June); and (ii) 2,000,000 shares of its Series A mandatory convertible preferred stock at a price of $200 per share, for gross proceeds of $400m (before deducting the underwriting discounts and commissions and estimated offering expenses, in both cases).
In addition, II-VI has granted the underwriters a 30-day option to purchase (at the applicable public offering price) up to an additional (i) 1,395,335 shares of its common stock; and (ii) 300,000 shares of Series A mandatory convertible preferred stock (solely to cover over-allotments), minus underwriting discounts and commissions.
Each offering is expected to close on or about 7 July, subject to the satisfaction of customary closing conditions.
Unless earlier converted, each share of Series A mandatory convertible preferred stock will automatically convert on 1 July 2023 (subject to postponement for certain market disruption or other events) into between 3.8760 and 4.6512 shares of II-VI’s common stock, subject to customary anti-dilution adjustments.
Dividends on the Series A mandatory convertible preferred stock will be payable on a cumulative basis when, as and if declared by II-VI’s board of directors, at an annual rate of 6% on the liquidation preference of $200 per share. If declared, these dividends will be payable in cash, by delivery of shares of II-VI’s common stock or through any combination of cash and shares, as determined by II-VI in its sole discretion, on 1 January, 1 April, 1 July and 1 October of each year, commencing on 1 October 2020 and ending on, and including, 1 July 2023.
BofA Securities, J.P. Morgan and Citigroup are acting as joint book-running managers for each offering.
II-VI expects to use up to $714.6m of the net proceeds from these offerings and/or cash on hand to repay borrowings (including accrued interest) under its existing credit agreement, and to use the remainder of net proceeds (if any) to develop, enhance, invest in or acquire related, emerging or complementary technologies, products or businesses and for other general corporate purposes.