Vocera to Offer $200.0 Million of Convertible Senior Notes Due 2026
Vocera Communications, Inc. (NYSE: VCRA) announced a proposed offering of $200 million in convertible senior notes due 2026, with an option for an additional $30 million. Proceeds will be used for capped call transactions to mitigate dilution, repurchase some of its 1.50% Convertible Senior Notes due 2023, and support general corporate purposes, which include R&D and potential acquisitions. The notes are unsecured and mature on September 15, 2026, with various conversion options. Interest rates and terms are yet to be determined.
- Proposed $200 million offering aimed at reducing dilution.
- Intended use of proceeds for corporate growth and strategic investments.
- Potential dilution of current shareholders due to conversion of notes.
- Uncertainty surrounding the repurchase of 2023 notes.
Vocera Communications, Inc. (NYSE: VCRA), a recognized leader in clinical communication and workflow solutions, today announced that it proposes to offer
Vocera expects to use a portion of the net proceeds from the offering of the notes to pay the cost of the capped call transactions described below to manage potential dilution. In addition, Vocera expects to use a portion of the net proceeds from the offering, together with shares of Vocera common stock, to repurchase a portion of its
Morgan Stanley & Co. LLC, Piper Sandler & Co., and William Blair & Company, L.L.C. are acting as initial purchasers of the notes.
In connection with the pricing of the notes, Vocera expects to enter into capped call transactions with one or more of the initial purchasers of the notes or their respective affiliates and/or other financial institutions (the “capped call counterparties”). The capped call transactions will cover, subject to customary adjustments, the number of shares of Vocera common stock that will initially underlie the notes. The capped call transactions are expected to offset the potential dilution to holders of Vocera common stock as a result of any conversion of the notes, with such offset subject to a cap. If the initial purchasers of the notes exercise their option to purchase additional notes, Vocera expects to enter into additional capped call transactions with the capped call counterparties.
In connection with establishing their initial hedges of the capped call transactions, Vocera expects the capped call counterparties and/or their respective affiliates to purchase Vocera common stock and/or enter into various derivative transactions with respect to Vocera common stock concurrently with, or shortly after, the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Vocera common stock or the notes at that time.
In addition, the capped call counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Vocera common stock and/or purchasing or selling Vocera common stock in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so on each exercise date of the capped call transaction). This activity could also cause or avoid an increase or decrease in the market price of Vocera common stock or the notes, which could affect noteholders’ ability to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of notes, it could affect the amount and value of the consideration that noteholders will receive upon conversion of such notes.
The notes will be senior, unsecured obligations of Vocera, and interest will be payable semi-annually.
The notes will mature on September 15, 2026, unless converted, redeemed or repurchased prior to such date. Prior to June 15, 2026, the notes will be convertible at the option of holders only under certain circumstances, and thereafter, at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the notes may be settled in shares of Vocera common stock, cash or a combination of cash and shares of Vocera common stock, at the election of Vocera.
Vocera may not redeem the notes prior to March 20, 2024. Vocera may redeem for cash all or a portion of the notes (subject to a partial redemption Limitation), at Vocera’s option, on or after March 20, 2024 if the last reported sale price of Vocera’s common stock has been at least
Holders of the notes will have the right, subject to certain exceptions, to require Vocera to repurchase for cash all or part of their notes at
The interest rate, conversion rate, offering price and other terms are to be determined by negotiations between Vocera and the initial purchasers.
Contemporaneously with the pricing of the notes in the offering, Vocera intends to enter into one or more separate and individually negotiated transactions with one or more holders of its 2023 notes to repurchase a portion of the 2023 notes on terms to be negotiated with each holder (each, a “note repurchase transaction”). The terms of each note repurchase transaction will depend on several factors. No assurance can be given as to how much, if any, of these 2023 notes will be repurchased or the terms on which they will be repurchased.
Vocera expects that holders of the 2023 notes who exchange their 2023 notes that have hedged their equity price risk with respect to the 2023 notes (the “hedged holders”) may enter into or unwind var
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