SAN DIEGO--(BUSINESS WIRE)--Illumina, Inc. (Nasdaq: ILMN) today announced the pricing of an offering of $650 million aggregate principal amount of its 0.0% convertible senior notes due 2023 (the “Notes”). The Notes are being offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Illumina has granted the initial purchasers an option to purchase up to an additional $100 million aggregate principal amount of the Notes on the same terms and conditions referenced above. The Notes will not bear interest and will mature on August 15, 2023, unless earlier repurchased, redeemed or converted.
The Notes will be convertible, subject to the satisfaction of certain conditions, into cash, shares of Illumina common stock or a combination thereof, at Illumina’s election. Prior to May 15, 2023, the Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The initial conversion rate of the Notes is 2.1845 shares of common stock per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $457.77 per share of common stock, subject to adjustment in certain circumstances. This initial conversion price represents a premium of approximately 40% relative to the last reported sale price on August 16, 2018 of Illumina’s common stock of $326.98.
The aggregate net proceeds to Illumina from the offering of the Notes will be approximately $637 million, exclusive of any proceeds attributable to the initial purchasers' possible exercise of their option to purchase additional Notes. Illumina intends to use the net proceeds of the offering to repurchase approximately $102.7 million of its common stock concurrently with the offering in privately negotiated transactions effected with or through the initial purchasers and/or their affiliates at a price per share of common stock of $326.98, and Illumina intends to use the remainder of the net proceeds of the offering for general corporate purposes, which may include the repayment of its 0.0% Convertible Senior Notes due 2019. The offering is expected to close on August 21, 2018, subject to customary closing conditions.
This press release does not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers of the Notes will be made only by means of a private offering memorandum. The Notes and any shares of Illumina common stock issuable upon conversion of the Notes have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Use of forward-looking statements
This release contains forward-looking statements that involve risks and uncertainties. Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are: (i) challenges inherent in developing, manufacturing, and launching new products and services, including expanding manufacturing operations and reliance on third-party suppliers for critical components; (ii) the timing and mix of customer orders among our products and services; (iii) the impact of recently launched or pre-announced products and services on existing products and services; (iv) our ability to further develop and commercialize our instruments and consumables and to deploy new products, services, and applications, and expand the markets, for our technology platforms; (v) our ability to manufacture robust instrumentation and consumables; (vi) the success of products and services competitive with our own; (vii) our ability to successfully identify and integrate acquired technologies, products, or businesses; (viii) our expectations and beliefs regarding future conduct and growth of the business and the markets in which we operate; and (ix) the application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public conference calls, the date and time of which are released beforehand. We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current quarter.
Illumina is improving human health by unlocking the power of the genome. Our focus on innovation has established us as the global leader in DNA sequencing and array-based technologies, serving customers in the research, clinical and applied markets. Our products are used for applications in the life sciences, oncology, reproductive health, agriculture and other emerging segments.