Onto Innovation Upsizes 0% Convertible Notes to $1.3 Billion
Onto Innovation priced an upsized $1.3 billion 0.00% convertible senior note issue due 2031 with a $381.80 initial conversion price, a 50% premium to May 18 share trade. It granted purchasers a $200 million option, struck capped calls at $509.06 and will use $205 million to repurchase 0.8 million shares.
1. Pricing and Terms
Onto Innovation upsized its private offering to $1.3 billion of 0.00% convertible senior notes due June 1, 2031, from an initial $1.1 billion target. The company also granted an option for $200 million additional notes to qualified institutional buyers under Rule 144A.
2. Conversion Mechanics and Capped Calls
The notes carry an initial conversion price of $381.80 per share, representing a 50% premium to the May 18 closing price, and an initial conversion rate of 2.6192 shares per $1,000 principal. In tandem, Onto Innovation entered capped call transactions with a $509.06 cap to reduce potential dilution or cash settlement costs.
3. Use of Proceeds and Repurchase Plan
Net proceeds are expected at $1.274 billion, or $1.47 billion if the option is fully exercised. The company will allocate $77.1 million for capped call costs, $205 million to repurchase 0.8 million shares at $254.53, and use remaining funds for general corporate purposes, including financing a 27% stake in Rigaku Holdings.