Vocera Communications Inc. priced an offering of $125.0 million aggregate principal amount of 1.50% convertible senior notes due May 15, 2023.
It will sell the notes to qualified institutional buyers. The company granted the initial purchasers an option to buy up to an additional $18.8 million aggregate principal amount of notes.
The sale is expected to close May 17.
Before Feb. 15, 2023, the notes will be convertible at the option of holders only under certain circumstances, and thereafter, at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the notes may be settled in shares of Vocera common stock, cash or a combination of cash and shares of Vocera common stock, at the election of Vocera.
The company may not redeem the notes prior to the maturity date.
The notes will have an initial conversion rate of 31.0073 shares of Vocera common stock per $1,000 principal amount of notes. This is equivalent to an initial conversion price of approximately $32.25 per share.
Vocera estimates that the net proceeds from the offering will be around $120.4 million, or $138.5 million if the initial purchasers buy additional notes in full, after deducting the initial purchasers’ discount and estimated offering expenses payable by the company. It expects to use some of the net proceeds to pay the cost of the capped call transactions to manage potential dilution. Remaining net proceeds will be used for working capital and other general corporate purposes.
Morgan Stanley & Co. LLC and Piper Jaffray are acting as initial purchasers of the notes.