UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 7, 2015
BROCADE COMMUNICATIONS SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
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Delaware |
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000-25601 |
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77-0409517 |
(State or other jurisdiction
of incorporation or organization) |
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(Commission
File Number) |
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(I.R.S. Employer
Identification Number) |
130 Holger Way
San Jose, CA 95134
(Address, including zip code, of principal executive offices)
(408) 333-8000
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
On January 7, 2015, Brocade Communications Systems, Inc. (the
Company), issued a press release announcing its intention to offer, subject to market and other conditions, up to $500 million principal amount of Convertible Senior Notes due in 2020 in a private offering to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933. In addition, the Company expects to grant the initial purchasers for the offering an option to purchase up to an additional $75 million principal amount of notes from the Company to
cover over-allotments. A copy of the press release is attached hereto as Exhibit 99.1 and is also incorporated herein by reference.
Item 9.01 |
Financial Statements and Exhibits. |
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Exhibit No. |
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Description |
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99.1 |
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Press Release, dated January 7, 2015 Brocade Announces Plans to Offer $500 Million in Convertible Senior Notes. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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BROCADE COMMUNICATIONS SYSTEMS, INC. |
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Date: January 7, 2015 |
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By: |
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/s/ Daniel W. Fairfax |
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Daniel W. Fairfax |
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Chief Financial Officer and Senior Vice President, Finance |
Exhibit Index
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Exhibit No. |
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Description |
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99.1 |
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Press Release, dated January 7, 2015 Brocade Announces Plans to Offer $500 Million in Convertible Senior Notes. |
Exhibit 99.1
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BROCADE CONTACTS |
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Public Relations Kristy Campbell
Tel: 408-333-4221 kcampbel@brocade.com |
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Investor Relations Michael Iburg
Tel: 408-333-0233 miburg@brocade.com |
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Brocade Announces Plans to Offer $500 Million in Convertible Senior Notes
SAN JOSE, CA, January 7, 2015 Brocade® (NASDAQ: BRCD) announced today that it intends to
offer, subject to market and other conditions, up to $500 million principal amount of Convertible Senior Notes due 2020 (the Notes) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of
1933, as amended (the Securities Act). In addition, Brocade expects to grant the initial purchasers for the offering an option to purchase up to an additional $75 million principal amount of Notes from Brocade solely to cover
over-allotments.
The Notes will be unsecured, senior obligations of Brocade, and interest will be payable semi-annually in arrears. Prior to the close of
business on the business day immediately preceding September 1, 2019, the Notes will be convertible at the option of holders only upon the satisfaction of certain conditions. Thereafter, the Notes will be convertible at the option of the
holders at any time until the close of business on the second scheduled trading day immediately preceding maturity on January 1, 2020. The Notes will be convertible into cash, shares of Brocades common stock, or a combination thereof, at
Brocades election. The interest rate, conversion rate and other terms of the Notes are to be determined upon pricing of the offering.
In connection
with the pricing of the Notes, Brocade expects to enter into privately negotiated convertible note hedge transactions with one or more of the initial purchasers, their affiliates or other financial institutions (the option
counterparties). The convertible note hedge transactions are expected generally to reduce the potential dilution to Brocades common stock upon any conversion of Notes and/or offset the cash payments Brocade may make in excess of the
principal amount of converted Notes in the event that the market price of Brocades common stock is greater than the strike price of those convertible note hedge transactions. Brocade also expects to enter into privately negotiated warrant
transactions with the option counterparties. The warrant transactions would separately have a dilutive effect to the extent that the market value per share of Brocades common stock exceeds the strike price of any warrant transactions, unless
Brocade elects, subject to certain conditions set forth in the related warrant confirmations, to settle the warrant transactions in cash. If the initial purchasers exercise their over-allotment option to purchase additional Notes, Brocade intends to
enter into additional convertible note hedge transactions and additional warrant transactions with the option counterparties.
Brocade expects that in
connection with establishing their initial hedge of the convertible note hedge transactions and warrant transactions, the option counterparties or their respective affiliates may enter into various derivative transactions with respect to
Brocades common stock concurrently with or shortly after, the pricing of the Notes and/or purchase shares of Brocades common stock prior to, concurrently with, or shortly after the pricing of the Notes. This activity could increase (or
reduce the size of any decrease in) the market price of Brocades common stock or the Notes at that time.
In addition, Brocade expects that the option counterparties or their respective affiliates may modify their hedge
positions by entering into or unwinding derivative transactions with respect to Brocades common stock and/or by purchasing or selling shares of Brocades common stock or other securities of Brocade in secondary market transactions
following the pricing of the Notes and prior to the maturity of the Notes (and are likely to do so during any observation period relating to a conversion of the Notes or in connection with any repurchase of Notes by Brocade). This activity could
also cause or avoid an increase or a decrease in the market price of Brocades common stock or the Notes, which could affect the ability of noteholders to convert the Notes and, to the extent the activity occurs during any observation period
related to a conversion of the Notes, could affect the amount and value of the consideration that noteholders will receive upon conversion of the Notes.
Brocade intends to use a portion of the net proceeds of the offering to pay the cost of the convertible note hedge transactions described above (after such
cost is partially offset by the proceeds to Brocade of the warrant transactions described above). In addition Brocade expects to use up to $100.0 million of the net proceeds of the offering to repurchase shares of Brocades common stock prior
to or concurrently with the pricing of the offering on the market or in privately negotiated transactions effected through one of the initial purchasers or its affiliate as Brocades agent. With respect to repurchases of Brocades common
stock effected prior to the pricing of the offering, Brocade expects the purchase price per share to equal the prevailing market price of Brocades common stock at the time of such repurchase. With respect to repurchases of Brocades
common stock effected concurrently with the pricing of the offering, Brocade expects to repurchase such shares from purchasers of notes in the offering at a purchase price per share equal to the closing price per share of Brocades common stock
on the date of the pricing of the offering. These repurchases could increase, or prevent a decrease in, the market price of Brocades common stock prior to or concurrently with the pricing of the notes, and could result in a higher effective
conversion price for the notes.
Brocade intends to use the remainder of the net proceeds to redeem all of Brocades outstanding 6.875% senior
secured notes due 2020 (the 2020 notes) and for general corporate purposes, including potential acquisitions and other business development activities. Concurrently with the closing of the offering, Brocade will issue a notice of
redemption for the 2020 notes and irrevocably deposit proceeds from the offering sufficient to discharge the 2020 notes in full, all in accordance with the terms of the 2020 notes. In addition, concurrently with the closing of the offering, Brocade
will terminate its senior secured credit facility.
The Notes, the convertible note hedge transactions, the warrants and any shares of Brocades
common stock underlying these securities (including any shares of Brocades common stock issuable upon conversion of the Notes) have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction
and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements.
This press release is
neither an offer to sell nor a solicitation of an offer to buy any of these securities nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any such state or jurisdiction.
Forward-Looking Statements
This press release contains forward-looking statements including, among other things, statements relating to the timing of the proposed offering, the expected
use of proceeds from the offering, the redemption and discharge of the 2020 notes and the termination of the senior secured credit facility. These forward-looking statements are made pursuant to the safe harbor provisions of the
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Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, whether or
not Brocade will offer the Notes or consummate the offering, the final terms of the offering, prevailing market conditions, the anticipated principal amount of the notes, the expected use of the proceeds of the offering and the impact of general
economic, industry or political conditions in the United States or internationally as well as other risks and uncertainties described in Brocades filings with the Securities and Exchange Commission, including under the caption Risk
Factors in the Annual Report on Form 10-K for the year ended November 1, 2014. Brocade assumes no obligation to update any such forward-looking statements after the date of this release.
© 2015 Brocade Communications Systems, Inc. All Rights Reserved.
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