Advanced Energy Announces Pricing of Offering of $500 Million of 2.50% Convertible Senior Notes

Advanced Energy Industries, Inc. (Nasdaq: AEIS), a global leader in highly engineered, precision power conversion, measurement, and control solutions, announced today the pricing of its private offering of $500 million aggregate principal amount of 2.50% Convertible Senior Notes due 2028 (the “notes”) at a premium of approximately 30% over the closing price of Advanced Energy’s common stock of $105.74 per share on September 7, 2023. The notes were offered only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Advanced Energy has granted to the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $75 million aggregate principal amount of the notes. The offering of the notes and the convertible hedge and warrant transactions described below are expected to close on September 12, 2023, subject to customary closing conditions.

Advanced Energy expects the net proceeds from the offering of the notes to be approximately $487.9 million ($561.2 million if the initial purchasers exercise their option to purchase the additional notes in full) after deducting the initial purchasers’ discounts and after deducting offering expenses payable by Advanced Energy. Advanced Energy intends to use the net proceeds from the offering for one or more of the following: (i) to fund plans for future growth, which may include strategic acquisitions, (ii) to opportunistically repay existing outstanding indebtedness, (iii) to repurchase additional common stock as part of our existing opportunistic share repurchase plan, or (iv) for general corporate purposes.

In addition, Advanced Energy intends to use the net proceeds from the offering (i) to enter into convertible note hedge transactions with one or more of the initial purchasers and/or their respective affiliates and/or other financial institutions (the “option counterparties”) (after such cost is partially offset by the proceeds to us from the sale by us of the warrant transactions to the option counterparties as described below), and (ii) to repurchase $40.0 million of Advanced Energy common stock, which was authorized by Advanced Energy’s board of directors, concurrently with this offering in privately negotiated transactions through one of the initial purchasers or its affiliate from purchasers of the notes in the offering. In connection with this offering, Advanced Energy repurchased approximately $40.0 million of its common stock, representing 378,286 shares of its common stock from purchasers of the notes in this offering. Such repurchases could affect the market price of Advanced Energy’s common stock concurrently with, or shortly after, the pricing of the notes, and could result in a higher effective conversion price for the notes. If the initial purchasers exercise their option to purchase additional notes, Advanced Energy expects to enter into additional convertible note hedge transactions and warrant transactions, and intends to use a portion of the net proceeds from the sale of any such additional notes to pay the costs of such additional convertible note hedge transactions (which would be partially offset by the proceeds to Advanced Energy from the sale of additional warrant transactions).