Onto Innovation Announces Proposed Private Offering of $1.1 Billion of Convertible Senior Notes Due 2031

Onto Innovation Inc. (NYSE: ONTO) (“Onto Innovation” or the “Company”) today announced that it intends to offer, subject to market and other conditions, $1,100,000,000 aggregate principal amount of Convertible Senior Notes due 2031 (the “Notes”), to be sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Onto Innovation also expects to grant to the initial purchasers of the Notes an option to purchase up to an additional $165,000,000 aggregate principal amount of the Notes, for settlement within a 13-day period beginning on, and including, the first date on which the Notes are issued.

Onto Innovation intends to use (i) a portion of the net proceeds from the offering to fund the cost of entering into the capped call transactions described below, (ii) up to approximately $300,000,000 of the net proceeds to repurchase shares of its common stock concurrently with the pricing of the offering in privately negotiated transactions effected with or through one of the initial purchasers or one or more of its affiliates and (iii) the remaining net proceeds for general corporate purposes, which may include financing the previously announced acquisition of 27% of the issued and outstanding shares of the common stock of Rigaku Holdings Corporation.

The Notes will be Onto Innovation’s senior unsecured obligations and will mature on June 1, 2031, unless earlier converted, redeemed or repurchased.

Onto Innovation will satisfy its conversion obligations by paying cash up to the aggregate principal amount of Notes to be converted and paying or delivering, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Notes being converted. The interest rate, the initial conversion rate and the other terms of the Notes will be determined upon pricing of the offering.

Capped Call

In connection with the pricing of the Notes, Onto Innovation expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers and/or their respective affiliates and/or other financial institutions (the “option counterparties”). The capped call transactions will cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of shares of Onto Innovation’s common stock initially underlying the Notes. If the initial purchasers exercise their option to purchase additional Notes, then Onto Innovation expects to enter into additional capped call transactions with the option counterparties. The capped call transactions are expected generally to reduce the potential dilution to Onto Innovation’s common stock upon any conversion of the Notes and/or offset any potential cash payments Onto Innovation is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the capped call transactions and the premium payable will be determined at the time of pricing of the offering.

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