ON Semiconductor Corporation (NASDAQ:ON) Files An 8-K Unregistered Sales of Equity Securities
Item3.02
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Unregistered Sales of Equity Securities. |
The disclosure set forth in Item 8.01 of this Current Report on
Form 8-K is incorporated herein by reference.
ON Semiconductor Corporation (the Company) offered and sold the
Notes (as defined below) to the Initial Purchasers (as defined
below) in reliance on the exemption from registration provided by
Section 4(a)(2) of the Securities Act of 1933, as amended (the
Securities Act), and for resale by the Initial Purchasers to
qualified institutional buyers to the exemption from registration
provided by Rule 144A under the Securities Act. The Company
relied on these exemptions from registration based in part on
representations made by the Initial Purchasers in the Purchase
Agreement (as defined below). The Notes and the shares of the
Companys common stock (Common Stock) issuable upon conversion of
the Notes, if any, have not been registered under the Securities
Act and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
To the extent that any shares of the Companys Common Stock are
issued upon conversion of the Notes, they will be issued in
transactions anticipated to be exempt from registration under the
Securities Act by virtue of Section 3(a)(9) thereof, because no
commission or other remuneration is expected to be paid in
connection with conversion of the Notes and any resulting
issuance of shares of the Companys Common Stock.
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Item8.01 |
Other Events. |
Purchase Agreement
On March14, 2017, the Company and certain of its subsidiaries, as
guarantors, entered into a purchase agreement (the Purchase
Agreement) with Morgan Stanley Co. LLC and Merrill Lynch, Pierce,
Fenner Smith Incorporated, as representatives of the several
initial purchasers named therein (collectively, the Initial
Purchasers), to issue and sell $500million aggregate principal
amount of its 1.625% senior convertible notes due 2023 (the
Notes) in a private placement to qualified institutional buyers
to Rule 144A under the Securities Act. In addition, the Company
granted the Initial Purchasers a 30-day option to purchase up to
an additional $75million aggregate principal amount of the Notes
on the same terms and conditions, which option was exercised in
full by the Initial Purchasers on March15, 2017 (the
Over-Allotment Exercise).
ThePurchase Agreementincludes customary representations,
warranties and covenants by the Company and customary closing
conditions. Under the terms of thePurchase Agreement, the Company
has agreed to indemnify the Initial Purchasers against certain
liabilities, including liabilities under the Securities Act.The
Company intends to use the net proceeds of the offering to pay a
portion of its outstanding indebtedness and to pay related
transaction fees and expenses. Settlement of the Notes is
expected to occur on March31, 2017.
Convertible Note Hedge Transactions
In connection with the pricing of the Notes on March14, 2017, and
in connection with the Over-Allotment Exercise on March15, 2017,
the Company entered into privately-negotiated convertible note
hedge transactions (the Convertible Note Hedges) with respect to
the Companys Common Stock with each of Morgan Stanley Co.
International plc, Bank of America, N.A., Deutsche Bank AG,
London Branch and Bank of Montreal (collectively, the
Counterparties). The aggregate cost of entering into the
Convertible Note Hedges is approximately $51.8million, which will
be partially offset by the proceeds from the sale of the Warrants
(as defined below). The Convertible Note Hedges cover, subject to
anti-dilution adjustments substantially similar to those in the
Notes, 27.7million shares of the Companys Common Stock, the same
number of shares initially underlying the Notes, at a strike
price that corresponds to the initial conversion price of the
Notes and are exercisable upon conversion of the Notes. The
Convertible Note Hedges will expire upon the maturity of the
Notes.
The Convertible Note Hedges are expected generally to reduce the
potential dilution to the Companys Common Stock upon conversion
of the Notes and/or offset the potential cash payments in excess
of the principal amount of the converted Notes the Company is
required to make in the event that the market price per share of
the Companys Common Stock, as measured under the terms of the
Convertible Note Hedges, at the time of exercise is greater than
the strike price of the Convertible Note Hedges.
The Convertible Note Hedges are separate transactions, entered
into by the Company with the Counterparties, and are not part of
the terms of the Notes. Holders of the Notes do not have any
rights with respect to the Convertible Note Hedges.
Warrant Transactions
In addition, in connection with entering into the Convertible
Note Hedges on March14, 2017 and March15, 2017, the Company
separately entered into privately-negotiated warrant
transactions, whereby the Company sold to the Counterparties
warrants (the Warrants) to acquire, collectively, subject to
anti-dilution adjustments, approximately 27.7million shares of
the Companys Common Stock at an initial strike price of $30.70
per share. The proceeds from the sale of the Warrants to the
Counterparties will be used to offset the cost of the Convertible
Note Hedges. If the market value per share of the Companys Common
Stock, as measured under the Warrants, exceeds the strike price
of the Warrants, the Warrants will have a dilutive effect on the
Companys earnings per share. Additionally, if the market value
per share of the Companys Common Stock, as measured under the
Warrants, exceeds the strike price of the Warrants during the
measurement period at the maturity of such Warrants, the Company
will owe the Counterparties a number of shares of the Companys
Common Stock in an amount based on the excess of such market
price per share of the Companys Common Stock over the strike
price of the Warrants.
The Warrant transactions are separate transactions, entered into
by the Company with the Counterparties, and are not part of the
terms of the Notes. Holders of the Notes do not have any rights
with respect to the Warrants.
The Warrants will be sold in private placements to the
Counterparties to an exemption from the registration requirements
of the Securities Act afforded by Section4(a)(2) of the
Securities Act.
About ON Semiconductor Corporation (NASDAQ:ON)
ON Semiconductor Corporation offers a portfolio of analog, digital and mixed signal integrated circuits (ICs), standard products, image sensors and custom devices for customers to solve their design challenges in advanced electronic systems and products. The Company operates through four segments: Application Products Group, Image Sensor Group, Standard Products Group, and System Solutions Group. The Company’s power management and motor driver semiconductor components control, convert, protect and monitor the supply of power to the different elements within a range of electronic devices. Its custom application specific integrated circuits (ASICs) use analog, digital signal processing (DSP), mixed-signal and advanced logic capabilities for its automotive, medical, military/aerospace, consumer and industrial customers’ products. Its signal management semiconductor components provide clock management and data flow management for precision computing, communications and industrial systems. ON Semiconductor Corporation (NASDAQ:ON) Recent Trading Information
ON Semiconductor Corporation (NASDAQ:ON) closed its last trading session 00.00 at 15.25 with 6,749,390 shares trading hands.