MKS Instruments Announces Pricing of Upsized Private Offering of $1.2 Billion of 1.25% Convertible Senior Notes

ANDOVER, Mass., May 13, 2024 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (NASDAQ: MKSI) (“MKS”) today announced the pricing of its offering of $1.2 billion aggregate principal amount of 1.25% convertible senior notes due 2030 (the “notes”). The notes will be offered and sold in a private placement (the “offering”) to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). MKS also granted to the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date MKS first issues the notes, up to an additional $200.0 million aggregate principal amount of the notes. The offering is expected to close on May 16, 2024, subject to satisfaction of customary closing conditions. The offering was upsized from the previously announced offering of $1.0 billion aggregate principal amount of convertible senior notes.

MKS estimates that the net proceeds from the offering will be approximately $1,177.7 million (or approximately $1,374.2 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers’ discounts and estimated offering expenses payable by MKS.

MKS intends to use approximately $143.52 million of the net proceeds from the offering to pay the cost of the capped call transactions described below. MKS intends to use the remaining net proceeds from the offering to repay approximately $1,034.1 million in borrowings outstanding under its First Lien USD tranche B term loan, together with accrued interest, as well as for general corporate purposes. If the initial purchasers exercise their option to purchase additional notes, MKS intends to use a portion of the net proceeds from the sale of such additional notes to enter into additional capped call transactions with certain of the initial purchasers or their respective affiliates and other financial institutions (the “option counterparties”) and the balance to repay additional borrowings, together with accrued interest, under its First Lien USD tranche B term loan.

The notes will be unsecured, senior obligations of MKS and will bear interest at a rate of 1.25% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2024. The notes will mature on June 1, 2030, unless earlier converted, redeemed or repurchased in accordance with their terms. Subject to certain conditions, on or after June 5, 2027, MKS may redeem for cash all or any portion of the notes at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of MKS common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the trading day immediately preceding the date the notice of redemption is sent.