Ultra Clean Prices Upsized $525.0 Million Convertible Senior Notes Offering

Core Viewpoint - Ultra Clean Holdings, Inc. has successfully priced an upsized offering of $525 million in convertible senior notes, increasing from the previously announced $400 million, with plans to use the proceeds for various corporate purposes, including share repurchases and working capital [1][2] Group 1: Offering Details - The offering consists of $525 million aggregate principal amount of 0.00% convertible senior notes due 2031, with settlement scheduled for March 3, 2026 [1] - The company has granted initial purchasers an option to buy an additional $75 million principal amount of notes within 13 days of issuance [1] - Estimated net proceeds from the offering are approximately $511.1 million, or $584.2 million if the option is fully exercised [1] Group 2: Use of Proceeds - Approximately $40 million of the net proceeds will be used to repurchase 672,608 shares of common stock [1] - About $21.9 million will fund the cost of entering into capped call transactions [1] - Remaining proceeds will be allocated for working capital, prepayment of a portion of the company's outstanding term loan, or other general corporate purposes [1] Group 3: Conversion and Redemption Features - The notes will not bear regular interest and will mature on March 15, 2031, with specific conversion rights for noteholders [1] - The initial conversion rate is set at 11.8001 shares of common stock per $1,000 principal amount of notes, equating to an initial conversion price of approximately $84.75 per share, representing a 42.5% premium over the last reported sale price of $59.47 [1] - The notes are redeemable at Ultra Clean's option starting March 20, 2029, under certain conditions [1] Group 4: Capped Call Transactions - Ultra Clean has entered into capped call transactions to cover the shares underlying the notes, with an initial cap price of $104.0725 per share, a 75% premium over the last reported sale price [1][2] - These transactions aim to reduce potential dilution of Ultra Clean's common stock upon conversion of the notes [2] - The option counterparties may engage in derivative transactions that could influence the market price of Ultra Clean's common stock [2]