Illumina, Inc. (NASDAQ: ILMN) today announced the pricing of an offering of $550 million aggregate principal amount of its 0% convertible senior notes due 2019 (the "2019 Notes") and $450 million aggregate principal amount of its 0.5% convertible senior notes due 2021 (the "2021 Notes" and, together with the 2019 Notes, the “Notes”). The Notes are being offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Illumina has granted the initial purchasers an option to purchase up to an additional $82.5 million aggregate principal amount of the 2019 Notes and $67.5 million aggregate principal amount of the 2021 Notes on the same terms and conditions referenced above. The 2019 Notes will not bear interest and will mature on June 15, 2019, unless earlier repurchased or converted. Interest on the 2021 Notes will be paid semi-annually at a rate of 0.50% per year and the Notes will mature on June 15, 2021, unless earlier repurchased or converted. The Notes will be convertible, subject to the satisfaction of certain conditions, into cash, shares of Illumina common stock or a combination thereof, at Illumina’s election. Prior to March 15, 2019 (in the case of the 2019 Notes) or March 15, 2021 (in the case of the 2021 Notes), the Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time through the second scheduled trading day immediately preceding the maturity date. The initial conversion rate of both the 2019 Notes and the 2021 Notes is 3.9318 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $254.34 per share of common stock, subject to adjustment in certain circumstances. This initial conversion price represents a premium of 55% relative to the last reported sale price on June 5, 2014 of Illumina’s common stock of $164.09.
The aggregate net proceeds to Illumina from the offering of the 2019 Notes and 2021 Notes will be approximately $985 million, exclusive of any proceeds attributable to the initial purchasers' possible exercise of their options to purchase additional Notes. Illumina expects to use the net proceeds from the offering and cash on hand to fund repurchases of up to $600 million aggregate principal amount of its outstanding 0.25% Convertible Senior Notes due 2016 (the “2016 Notes”) through privately negotiated transactions. The offering is expected to close on June 11, 2014, subject to customary closing conditions.Goldman, Sachs & Co. and BofA Merrill Lynch are acting as initial purchasers of the Notes. This press release does not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers of the securities will be made only by means of a private offering memorandum. The securities and the shares of Illumina common stock issuable upon conversion or exercise of the securities have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Use of forward-looking statements This release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements are based on our expectations as of the date of this release and may differ materially from actual future events or results. Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are (i) our ability to further develop and commercialize our instruments and consumables and to deploy new products, services, and applications, and expand the markets, for our technology platforms; (ii) our ability to manufacture robust instrumentation and consumables; (iii) our ability to successfully identify and integrate acquired technologies, products, or businesses; (iv) our expectations and beliefs regarding future conduct and growth of the business and the markets in which we operate; (v) challenges inherent in developing, manufacturing, and launching new products and services; and (vi) our ability to maintain our revenue levels and profitability during periods of research funding reduction or uncertainty and adverse economic and business conditions, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public conference calls, the date and time of which are released beforehand. We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current financial quarter.
About IlluminaIllumina ( www.illumina.com) is a leading developer, manufacturer, and marketer of life science tools and integrated systems for the analysis of genetic variation and function. We provide innovative sequencing and array-based solutions for genotyping, copy number variation analysis, methylation studies, gene expression profiling, and low-multiplex analysis of DNA, RNA, and protein. We also provide tools and services that are fueling advances in consumer genomics and diagnostics. Our technology and products accelerate genetic analysis research and its applications, paving the way for molecular medicine and ultimately transforming healthcare.