MKS Instruments Announces Proposed $1.0 Private Offering

ANDOVER, Mass., May 13, 2024 (GLOBE NEWSWIRE) — MKS Instruments, Inc. (NASDAQ: MKSI) (“MKS”) today announced its intention to offer, subject to market and other conditions conditions, an aggregate principal amount of $1.0 billion. of convertible senior notes due 2030 (the “Notes”) in a private placement (the “offering”) to persons reasonably believed to be qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). MKS also plans to grant to the initial purchasers of the Notes an option to purchase, within a 13 day period beginning with and including the date on which MKS first issues the Notes, up to an additional aggregate principal amount of $150 .0 million dollars of notes. The offering is subject to market and other conditions, and there can be no assurance as to whether, when or on what terms the offering may be completed.

MKS intends to use a portion 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 $850.0 million of outstanding borrowings under its US Dollar Tranche B Secured Term Loan, 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 one or more of the initial purchasers of the Notes or their respective affiliates and/or other financial institutions (the “Option Counterparties”) and the balance to repay additional borrowings, together with accrued interest, under its secured term loan of tranche B in US dollars.

The Notes will be senior unsecured obligations of MKS and will bear interest payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2024. The Notes will mature on June 1, 2030, at unless they are converted sooner. , redeemed or repurchased in accordance with their conditions. Subject to certain conditions, on or after June 5, 2027, MKS may repurchase for cash all or any portion of the Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repaid, plus accrued and unpaid interest for, but excluding the repurchase 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 (consecutive or not) at of the period of 30 consecutive trading days. days ending on and including the trading day, immediately preceding the date of sending of the redemption notice.

Upon conversion, MKS will pay cash up to the aggregate principal amount of the Notes to be converted and will pay or deliver, as applicable, cash, shares of common stock or a combination of cash and shares of common stock, as applicable. from MKS. , with respect to the balance, if any, of its conversion obligation in excess of the aggregate principal amount of the Notes converted. Prior to March 1, 2030, holders of Notes could convert all or a portion of their Notes only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the due date. The interest rate, conversion rate, conversion price and certain other terms of the Notes will be determined at the time of pricing of the offering.

If MKS undergoes a fundamental change (as defined in the indenture governing the Notes) prior to the Maturity Date of the Notes, Holders may require MKS to repurchase for cash all or any portion of their Notes at a repurchase price of fundamental change equal to 100%. of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest up to, but excluding, the fundamental change repurchase date.

With respect to the pricing of the Notes, MKS expects to enter into privately negotiated capped call transactions with the option counterparties. The capped call transactions are generally expected to reduce the potential dilution of MKS’s common stock upon conversion of any notes and/or offset any cash payments MKS is required to make in excess of the principal amount of any converted notes, depending on the case. , this reduction and/or compensation being capped. If the initial purchasers exercise their option to purchase additional notes, MKS expects to enter into additional capped call transactions with the option counterparties.

MKS has been informed that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties and/or their respective affiliates intend to enter into various derivative transactions with respect to shares of MKS common stock and/or or purchase MKS common stock. simultaneously or shortly after the fixing of ticket prices. This activity could increase (or reduce the magnitude of any decrease in) the market price of MKS’s common stock or the Notes at that time.

In addition, MKS expects the option counterparties and/or their respective affiliates to modify their hedging positions by entering into or unwinding various derivative products with respect to MKS common stock and/or purchasing or selling shares MKS common stock or other MKS securities in secondary market transactions. following the valuation of the securities and before the maturity of the securities (and are likely to do so (x) during any observation period linked to a conversion of securities or following any optional reimbursement or repurchase of securities by MKS within the framework any fundamental change and (y) following any repurchase of Notes by MKS other than in connection with an optional repurchase or fundamental change if MKS elects to unwind a corresponding portion of the capped call transactions under of such redemption). This activity could cause or avoid an increase or decrease in the market price of MKS common stock or the Notes, which could affect the ability of the Noteholders to convert the Notes and, to the extent the activity occurs after conversion or during any observation period related to a conversion of Notes, it could affect the amount and value of the consideration that holders of Notes will receive upon conversion of such Notes.

The Notes will be offered and sold to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The offer and sale of the Notes and any shares of MKS common stock issuable upon conversion of the Notes, if any, have not been and will not be registered under the Securities Act or any securities laws. state securities and, unless so registered, such securities may not be offered or sold in the United States absent registration or applicable exemption, or in a transaction not subject to registration requirements of the Securities Act and other applicable securities laws. Any offering of Notes will be made only by means of a private offering memorandum.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be illegal under the securities laws of any such state or jurisdiction.

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, including regarding the size and timing of the offer. , the granting to the initial purchasers of an option to purchase additional notes in the offering, the use of the proceeds of the offering, the terms of the notes and the related capped call transactions and the effects potential of entering into capped purchase transactions within the framework of ticket pricing. These statements are only predictions based on current assumptions and expectations. Any statement that is not a statement of historical fact (including statements containing the words “will”, “plans”, “intends”, “believes”, “plans”, “anticipates”, “s ‘expects’, ‘estimates’, ‘forecasts’, ‘continues’ and similar expressions) should be considered forward-looking statements. Forward-looking statements are not promises or guarantees of future performance and are subject to various risks and uncertainties, many of which are beyond MKS’s control. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors beyond our control, including, without limitation, market risks and uncertainties, the achievement of offering on the expected terms or at all, and other important risks and factors described in MKS’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, in all subsequent Quarterly Reports on Form 10-Q , in the preliminary offering memorandum linked to the offer and in subsequent versions. filings made by MKS with the United States Securities and Exchange Commission. Forward-looking statements speak only as of the date hereof and, except as required by law, MKS undertakes no obligation to update or revise these forward-looking statements.

MKS Investor Relations Contact:
David Ryjik
Vice President, Investor Relations
Telephone: (978) 557-5180
Email: [email protected]

Press Relations Contacts:
Bill Casey
Senior Director, Marketing Communications
Telephone: (630) 995-6384
Email: [email protected]

Kerry Kelly, partner
Kekst CNC
Email: [email protected]