Advanced Energy Announces Proposed Offering of $500 Million Convertible Senior Notes

Advanced Energy Industries, Inc. (Nasdaq: AEIS), a global leader in highly engineered, precision power conversion, measurement, and control solutions, announced today that it intends to offer, subject to market and other conditions, $500 million aggregate principal amount of Convertible Senior Notes due 2028 (the “notes”) in a private offering. The notes will be 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 also expects to grant to the initial purchasers of the notes an option to purchase, up to an additional $75 million aggregate principal amount of the notes.

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 up to $60 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. 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).