SAN DIEGO, Dec. 3, 2012 /PRNewswire/ -- Volcano Corporation
(NASDAQ: VOLC) today announced its intention to offer, subject to
market and other conditions, $350
million principal amount of convertible senior notes due
December 1, 2017 in an offering
registered under the Securities Act of 1933, as amended. Prior to
August 7, 2017, the notes will be
convertible only upon certain circumstances and during certain
periods. Upon conversion, holders will receive up to the principal
amount of the notes in cash and any excess conversion value in
shares of Volcano's common stock. Volcano also expects to grant the
underwriters of the offering an option to purchase up to
$52.5 million aggregate principal
amount of additional notes to cover over-allotments.
The notes will be general senior unsecured obligations of
Volcano and will pay interest semi-annually. The interest rate,
conversion rate, offering price and other terms will be determined
at the time of pricing of the offering. Volcano expects to use a
portion of the net proceeds of the offering of the notes to pay the
costs of the convertible note hedge transactions described below,
taking into account the proceeds of the warrant transactions
described below, and may use up to approximately $50.0 million of the net proceeds from the
offering to fund repurchases of its outstanding 2.875% Convertible
Senior Notes due 2015 (the "2015 Notes"). Volcano may also use a
portion of the net proceeds to invest in or acquire complementary
products, businesses or technologies. The remaining net
proceeds are intended for working capital and general corporate
purposes.
In connection with any repurchases of Volcano's outstanding 2015
Notes, Volcano expects to terminate the convertible note hedge
transactions and warrant transactions it entered into at the time
of the offering of the 2015 Notes in an amount corresponding to the
portion of the 2015 Notes so repurchased, and Volcano expects to
receive from its counterparty to these transactions a net payment
resulting from such partial termination, the amount of which will
depend on many factors, including, without limitation, the market
price of Volcano's common stock and overall market conditions at
the time these transactions are partially terminated. Volcano has
been advised by its counterparty to these transactions that it or
its affiliate does not expect to unwind its existing hedge
positions with respect to these transactions and will instead use
these existing hedge positions in connection with establishing its
initial hedge positions with respect to the convertible note hedge
transactions and warrant transactions entered into in connection
with this offering of notes.
In connection with the pricing of the notes, Volcano expects to
enter into convertible note hedge transactions with one or more of
the underwriters and/or their respective affiliates (the "option
counterparties"), which are expected to reduce the potential
dilution with respect to Volcano's common stock upon conversions of
the notes. Volcano also expects to enter into warrant
transactions with the option counterparties, which could have a
dilutive effect on Volcano's common stock to the extent that the
market value per share of Volcano's common stock, as measured under
the warrant transactions, exceeds the strike price of the warrant
transactions. If the underwriters exercise their
over-allotment option to purchase additional notes, Volcano expects
to enter into additional convertible note hedge transactions and
additional warrant transactions.
Volcano has been advised that, in connection with establishing
their initial hedge positions with respect to the convertible note
hedge transactions and the warrant transactions, the option
counterparties, and/or their affiliates, expect to enter into
various over-the-counter derivative transactions with respect to
Volcano's common stock concurrently with and/or shortly after the
pricing of the notes. These activities could have the effect
of increasing, or limiting a decline in, the market price of
Volcano's common stock concurrently with and/or shortly after the
pricing of the notes.
In addition, the option counterparties and/or their affiliates
may modify their hedge positions from time to time prior to
conversion, repurchase or maturity of the notes by entering into
and unwinding various over-the-counter derivative transactions
and/or purchasing and selling shares of Volcano's common stock
and/or Volcano's other securities, including the notes and/or other
instruments they may wish to use in connection with such hedging
activities (and are likely to do so during any observation period
related to a conversion of the notes).
J.P. Morgan Securities LLC and Goldman, Sachs & Co. are the
joint managers of the note offering. The notes will be offered and
sold under Volcano's shelf registration statement filed with the
Securities and Exchange Commission ("SEC") on September 13, 2010, which was effective upon
filing. Before you invest, you should read the prospectus and
preliminary prospectus supplement to that registration statement
and other documents Volcano has filed with the SEC for more
complete information about Volcano and this offering. You may get
these documents at the SEC web site at www.sec.gov. Printed copies
of the preliminary prospectus supplement relating to this offering
may also be obtained by requesting copies from J.P. Morgan
Securities LLC, Attention: Broadridge Financial Solutions at 1155
Long Island Avenue, Edgewood, New
York 11717, or by telephone at 866-803-9204; or from
Goldman, Sachs & Co., Attention: Prospectus Department at 200
West Street, New York, New York
10282, or by telephone at 866-471-2526, or by e-mailing
prospectus-ny@ny.email.gs.com.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any
sales of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any jurisdiction.
About Volcano Corporation
Volcano Corporation is revolutionizing the medical device
industry with a broad suite of technologies that make imaging and
therapy simpler, more informative and less invasive. Our products
empower physicians around the world with a new generation of
analytical tools that deliver more meaningful information—using
light and sound as the guiding elements. Founded in cardiovascular
care and expanding into other specialties, Volcano is changing the
assumption about what is possible in improving patient outcomes by
combining imaging and therapy together.
Forward-Looking Information
This press release includes forward-looking statements, within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995, that are subject to risks, uncertainties and other factors,
including regarding the offering described above, the current
market demand for these types of securities and the securities of
Volcano and the negotiations between Volcano and the underwriters
due to changes in our stock price, corporate or other market
conditions. These risks, uncertainties and other factors could
cause actual results to differ materially from those referred to in
the forward-looking statements. The reader is cautioned not to rely
on these forward-looking statements. Other risks that could impact
the offering or Volcano's business are described in detail in the
preliminary prospectus relating to the proposed offering, as filed
with the SEC, as well as in Volcano's subsequent filings made with
the SEC. Undue reliance should not be placed on forward-looking
statements, which speak only as of the date they are made. Volcano
undertakes no obligation to update any forward-looking statements
to reflect new information, events or circumstances after the date
they are made, or to reflect the occurrence of unanticipated
events.
SOURCE Volcano Corporation