News Article
Rudolph proposes an offering of $50 million
The manufacturer of defect inspection, process control metrology, and data analysis systems and software used by compound semiconductor device manufacturers is offering convertible senior notes due 2016.
Rudolph Technologies’notes will be sold only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Company also intends to grant to the initial purchaser of the notes an option to purchase up to an additional $10 million aggregate principal amount of the notes.
The Company will use a portion of the proceeds of the offering to pay the cost of a convertible note hedge transaction in connection with the offering as described below. The Company intends to use the remaining net proceeds from the offering for general corporate purposes, which may include financing potential acquisitions and strategic transactions, growth initiatives and working capital.
The notes will be general unsecured and unsubordinated obligations of the Company, ranking equally in right of payment to all existing and future senior indebtedness, and senior in right of payment to any future indebtedness that is expressly subordinated to the notes, of the Company. The notes will be convertible, subject to certain conditions.
Upon conversion, the Company will pay cash up to the aggregate principal amount of the notes to be converted and deliver shares of its common stock in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal amount of the notes being converted. The interest rate, conversion rate, conversion price and other terms of the notes will be determined at the time of the pricing of the offering.
In connection with the offering of the notes, the Company plans to enter into convertible note hedge and warrant transactions with an affiliate of the initial purchaser. The convertible note hedge transaction is intended to reduce the potential dilution upon conversion of the notes. However, the warrant transaction will have a dilutive effect on the Company's earnings per share to the extent that the price of its common stock exceeds the strike price of the warrant.
The Company expects that the counterparty will enter into various over-the-counter derivative transactions with respect to the Company’s common stock concurrently with, or shortly after, the pricing of the notes and may unwind or enter into various over-the-counter derivatives and/or purchase the Company’s common stock in secondary market transactions following the pricing of the notes. If the initial purchaser exercises its option to purchase additional notes, the Company may enter into additional convertible note hedge and warrant transactions.
