Advanced Energy Announces Closing of Offering of $575 Million of 2.50% Convertible Senior Notes With Initial Purchasers’ Option Fully Exercised

Advanced Energy Industries, Inc. (Nasdaq: AEIS), a global leader in highly engineered, precision power conversion, measurement, and control solutions, announced today the closing of its previously announced private offering of $575 million aggregate principal amount of 2.50% Convertible Senior Notes due 2028 (the “notes”), which amount includes the full exercise of the initial purchasers’ option to purchase an additional $75 million aggregate principal amount of the notes.

Advanced Energy received net proceeds from the offering of the notes of approximately $561.2 million 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 used approximately $40.1 million of the net proceeds from the offering to enter into convertible note hedge transactions described below (after such cost was partially offset by the proceeds to us from the sale by us of the warrant transactions to the option counterparties, with a warrant strike price of approximately $179.76 per share subject to certain adjustments), and used approximately $40.0 million of the net proceeds from the offering to repurchase 378,286 shares of Advanced Energy common stock from purchasers of the notes in this offering. Including cash used in these two items, the total final proceeds were approximately $481.0 million.

The notes are Advanced Energy’s senior unsecured obligations, bear interest at a rate of 2.50% per year, and will mature on September 15, 2028, unless earlier repurchased, redeemed or converted. The initial conversion rate is 7.2747 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $137.46 per share, representing a premium of approximately 30% over the closing price of the common stock of $105.74 per share on September 7, 2023. Advanced Energy will satisfy any conversion elections by paying cash up to the aggregate principal amount of the notes to be converted, and paying or delivering, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at Advanced Energy’s election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the notes to be converted.