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North Reading-based semiconductor testing equipment maker Teradyne Inc. says the company will offer $150 million worth of convertible notes in an effort to raise capital.
The notes will be convertible in 2014 and will be offered through an automatically effective registration statement filed with the U.S. Securities and Exchange Commission today. In addition, Teradyne (NYSE: TER) expects to grant the underwriters an option to purchase up to an additional $22.5 million of notes within 13 days of the initial issuance of the notes to cover over-allotments.
In connection with the offering, Teradyne intends to enter into convertible note hedge and warrant transactions with an affiliate of an underwriter, though details were not provided. The hedge and warrant transactions are expected to reduce the potential dilution to Teradyne’s common stock upon future conversions of the notes, according to a company statement.
The company expects to use the net proceeds of the transactions to reduce outstanding amounts and to terminate its senior secured credit facility. Remaining proceeds will be used for general corporate purposes.
Teradyne, which was founded in 1960 and employs more than 3,600 people, reported $1.1 billion in revenue in 2008, nearly equal to its 2007 revenue, but also posted a $398 million net loss, a considerable swing from the $78 million net gain the company made in 2007. As a result of the increasing loss, the company announced job cuts in January, amounting to 14 percent of its workforce, as well as a 10 percent pay cut across the company, in an effort reduce expenses.
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