NORTH READING, Mass.--(BUSINESS WIRE)--
Teradyne, Inc. (“Teradyne”) (NYSE: TER) announced that it intends to
offer, subject to market and other conditions, $400 million aggregate
principal amount of Senior Convertible Notes due 2023 (the “Notes”) in a
private offering. The Notes will be offered only to qualified
institutional buyers in reliance on Rule 144A under the Securities Act
of 1933, as amended (the “Act”). Teradyne also expects to grant to the
initial purchasers of the Notes a 30-day option to purchase up to an
additional $60 million aggregate principal amount of Notes, solely to
cover over-allotments, if any.
The Notes will pay interest semi-annually in cash on June 15 and
December 15 and will mature on December 15, 2023. Conversions of the
Notes will be settled in cash, shares of Teradyne’s common stock or a
combination thereof, at Teradyne’s election. The interest rate, the
conversion rate of the Notes and certain other terms of the Notes will
be determined by negotiations between Teradyne and the initial
purchasers of the Notes.
In connection with the pricing of the Notes, Teradyne expects to enter
into one or more privately negotiated convertible note hedge
transactions with one or more of the initial purchasers of the Notes or
their affiliates (the “hedge counterparties”). The convertible note
hedge transactions collectively are expected to cover, subject to
customary anti-dilution adjustments, the aggregate number of shares of
Teradyne common stock that will initially underlie the Notes. Teradyne
also expects to enter into one or more privately negotiated warrant
transactions with the hedge counterparties whereby Teradyne will sell to
the hedge counterparties warrants relating to the same number of shares
of Teradyne common stock, with such number of shares subject to
customary anti-dilution adjustments. In addition, if the initial
purchasers exercise their over-allotment option to purchase additional
Notes, Teradyne expects to enter into one or more additional warrant
transactions and to use a portion of the proceeds from the sale of the
additional Notes and warrant transactions to enter into additional
convertible note hedge transactions. The convertible note hedge
transactions are expected to reduce the potential dilution with respect
to Teradyne common stock and/or offset any potential cash payments
Teradyne is required to make in excess of the principal amount of
converted Notes, as the case may be, upon any conversion of the Notes in
the event that the market price per share of Teradyne common stock
exceeds the strike price of the convertible note hedge transactions.
However, the warrant transactions could have a dilutive effect to the
extent that the market price per share of Teradyne common stock exceeds
the applicable strike price of the warrants on any expiration date of
the warrants.
In connection with establishing their initial hedge of the convertible
note hedge transactions and warrant transactions and concurrently with,
or shortly after, the pricing of the Notes, the hedge counterparties
and/or their affiliates expect to purchase Teradyne common stock in open
market transactions and/or privately negotiated transactions and/or
enter into various cash-settled derivative transactions with respect to
Teradyne common stock. In addition, the hedge counterparties and/or
their affiliates may modify their hedge positions following the pricing
of the Notes by entering into or unwinding various derivative
transactions with respect to Teradyne common stock and/or by purchasing
or selling Teradyne common stock in open market transactions and/or
privately negotiated transactions following the pricing of the Notes
from time to time (and are likely to do so during any conversion period
related to a conversion of Notes). Any of these hedging activities could
also increase, decrease or prevent a decline in, the market price of
Teradyne common stock or the Notes.
Teradyne estimates that the net proceeds from the offering will be
approximately $392.0 million (or approximately $450.8 million if the
underwriters exercise in full their option to purchase additional
Notes), after deducting discounts, commissions and estimated offering
expenses. Teradyne intends to use a portion of the net proceeds from
this offering to pay the cost of the convertible note hedge transactions
(after such cost is partially offset by the proceeds to Teradyne of the
warrant transactions). Teradyne also intends to use a portion of the net
proceeds to repurchase up to $80 million of shares of its common stock
under its existing share repurchase authorization from purchasers of
Notes in this offering in privately negotiated transactions effected
through one or more of the initial purchasers or their affiliates,
concurrently with the pricing of this offering. The remaining net
proceeds will be used for general corporate purposes, including to
repurchase additional shares of Teradyne’s common stock.
In connection with the offering, Teradyne’s Board of Directors has
approved a new $500 million share repurchase authorization to commence
on January 1, 2017. The $500 million authorization replaces Teradyne’s
existing share repurchase authorization, which will terminate on
December 31, 2016.
The Notes and the shares of Teradyne common stock issuable upon
conversion, if any, have not been registered under the Act or applicable
state securities laws and may not be offered or sold in the United
States except pursuant to an exemption from the registration
requirements of the Act and applicable state securities laws.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there be any
sale of these securities in any state in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under
the securities laws of any such state.
Safe Harbor Statement
This press release may contain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934. Such statements include information
regarding Teradyne's current beliefs, plans and expectations, including
without limitation the matters set forth below. Words such as
“anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”
“forecast,” “believe,” “could,” “would,” “should,” “if,” “may,” “might,”
“future,” “target,” “goal,” “trend,” “seek to,” “will continue,”
“predict,” “likely,” “in the event,” variations of any such words or
similar expressions contained herein are intended to identify such
forward-looking statements, although not all forward-looking statements
contain these words. These forward-looking statements are only
predictions and, accordingly, are subject to substantial risks,
uncertainties and assumptions. Teradyne's future results may differ
materially from its past results and from those projected in the
forward-looking statements due to various uncertainties and risks.
Factors that could affect Teradyne's future operating results and cause
actual results to vary materially from the forward-looking statements
made in this press release or that might cause Teradyne to modify its
plans or objectives include, but are not limited to: ability to predict
and plan for global and industry-specific economic cycles; risks
associated with intense competition in Teradyne's industry; ability to
obtain orders from a few significant customers; risks associated with
operating internationally, including currency fluctuations; ability to
develop new products which meet Teradyne's customer needs; uncertainty
of customer acceptance of new products, delays in or lack of customer
acceptance of new products; risks associated with reliance on Teradyne's
suppliers and outsourced service providers; risks associated with
acquisitions; ability to comply with environmental regulations;
uncertainty of current or future litigation or regulatory proceedings;
risks associated with Teradyne's intellectual property; changing tax
regulations, both domestic and international; risks associated with
customer guarantees, indemnification and confidentiality obligations;
risks associated with incurring additional indebtedness in the future;
ability to attract and retain key employees; risks associated with
natural catastrophic events; risks associated with breach of Teradyne's
operational or security systems; risks associated with shareholder
activism; and risks associated with the offering described in this press
release. You should carefully consider the risks and uncertainties
outlined in greater detail in Part I, Item 1A in Teradyne's Form 10-K
for the fiscal year ended December 31, 2015 and Part II, Item 1A in
Teradyne's Form 10-Q for the quarter ended October 2, 2016, before
making any investment decision with respect to such Notes. These
factors, individually or in the aggregate, may cause Teradyne's actual
results to differ materially from its expected results. You should
understand that it is not possible to predict or identify all such
factors. In addition, you should not place undue reliance on the
forward-looking statements contained in this press release, which are
made only as of the date of this press release. We undertake no
obligation to revise or update publicly any forward-looking statement
for any reason, except as otherwise required by law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161205006251/en/
Teradyne, Inc.
Andy Blanchard, 978-370-2425
Vice President of
Corporate Relations
Source: Teradyne, Inc.
