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Volcano Corporation To Offer $350 Million Convertible Senior Notes Due 2017

In connection with the pricing of the notes, Volcano expects to enter into convertible note hedge transactions with one or more of the underwriters and/or their respective affiliates (the "option counterparties"), which are expected to reduce the potential dilution with respect to Volcano's common stock upon conversions of the notes.  Volcano also expects to enter into warrant transactions with the option counterparties, which could have a dilutive effect on Volcano's common stock to the extent that the market value per share of Volcano's common stock, as measured under the warrant transactions, exceeds the strike price of the warrant transactions.  If the underwriters exercise their over-allotment option to purchase additional notes, Volcano expects to enter into additional convertible note hedge transactions and additional warrant transactions.

Volcano has been advised that, in connection with establishing their initial hedge positions with respect to the convertible note hedge transactions and the warrant transactions, the option counterparties, and/or their affiliates, expect to enter into various over-the-counter derivative transactions with respect to Volcano's common stock concurrently with and/or shortly after the pricing of the notes.  These activities could have the effect of increasing, or limiting a decline in, the market price of Volcano's common stock concurrently with and/or shortly after the pricing of the notes.

In addition, the option counterparties and/or their affiliates may modify their hedge positions from time to time prior to conversion, repurchase or maturity of the notes by entering into and unwinding various over-the-counter derivative transactions and/or purchasing and selling shares of Volcano's common stock and/or Volcano's other securities, including the notes and/or other instruments they may wish to use in connection with such hedging activities (and are likely to do so during any observation period related to a conversion of the notes). 

J.P. Morgan Securities LLC and Goldman, Sachs & Co. are the joint managers of the note offering. The notes will be offered and sold under Volcano's shelf registration statement filed with the Securities and Exchange Commission ("SEC") on September 13, 2010, which was effective upon filing.  Before you invest, you should read the prospectus and preliminary prospectus supplement to that registration statement and other documents Volcano has filed with the SEC for more complete information about Volcano and this offering. You may get these documents at the SEC web site at www.sec.gov. Printed copies of the preliminary prospectus supplement relating to this offering may also be obtained by requesting copies from J.P. Morgan Securities LLC, Attention: Broadridge Financial Solutions at 1155 Long Island Avenue, Edgewood, New York 11717, or by telephone at 866-803-9204; or from Goldman, Sachs & Co., Attention: Prospectus Department at 200 West Street, New York, New York 10282, or by telephone at 866-471-2526, or by e-mailing prospectus-ny@ny.email.gs.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sales of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any jurisdiction.

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