MKS Instruments Announces Closing of Private Offering of $1.4 Billion of 1.25% Convertible Senior Notes, Including Full Exercise of Option to Purchase $200 Million of Additional Notes

ANDOVER, Ma., May 16, 2024 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (NASDAQ: MKSI) (“MKS”) today announced the closing of its offering of $1.4 billion aggregate principal amount of its 1.25% convertible senior notes due 2030 (the “notes”). The net proceeds from the offering were approximately $1,374.2 million, after deducting the initial purchasers’ discounts and estimated offering expenses payable by MKS. The net proceeds include the full exercise of the $200.0 million option granted by MKS to the initial purchasers of the notes. The notes were 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 used approximately $167.4 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 $1,206.0 million in borrowings outstanding under its First Lien USD tranche B term loan, together with accrued interest, as well as for general corporate purposes.

The notes are unsecured, senior obligations of MKS and 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.

The conversion rate for the notes is initially 6.4799 shares of MKS common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $154.32 per share. This represents a premium of approximately 30.0% over the last reported sale price of $118.71 per share of MKS common stock on The Nasdaq Global Select Market on May 13, 2024. The conversion rate is subject to adjustment upon the occurrence of certain events.