SolarEdge Technologies, Inc. (Nasdaq: SEDG) (“SolarEdge”) today
announced the pricing of $300 million aggregate principal amount of
2.25% Convertible Senior Notes due 2029 (the “Notes”) in a private
offering (the “Offering”) to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”). In
connection with the Offering, SolarEdge has granted the initial
purchasers of the Notes a 13-day option to purchase up to an
additional $45 million aggregate principal amount of the Notes on
the same terms and conditions. The sale of the Notes to the initial
purchasers is expected to settle on June 28, 2024, subject to
customary closing conditions.
The Notes will bear interest at a rate of 2.25% per year,
payable semiannually in arrears on January 1 and July 1 of each
year, beginning on January 1, 2025. The Notes will mature on July
1, 2029, unless earlier repurchased, redeemed or converted in
accordance with their terms prior to such date.
SolarEdge will not be able to redeem the Notes prior to June 28,
2027. On or after June 28, 2027, SolarEdge may redeem the Notes at
its option if the last reported sale price of SolarEdge’s common
stock has been at least 130% of the conversion price then in effect
for at least 20 trading days (whether or not consecutive) during
any 30 consecutive trading day period (including the last trading
day of such period) ending on and including the trading day
immediately preceding the date on which SolarEdge provides notice
of redemption, at a redemption price equal to 100% of the principal
amount of the Notes to be redeemed, plus accrued and unpaid
interest, if any, to, but excluding, the redemption date.
Holders of the Notes will have the right to require SolarEdge to
repurchase all or a portion of their Notes upon the occurrence of a
fundamental change (as defined in the indenture governing the
Notes) in cash at a fundamental change repurchase price of 100% of
their principal amount plus any accrued and unpaid interest to, but
not including, the fundamental change repurchase date. Following
certain corporate events or if SolarEdge issues a notice of
redemption, SolarEdge will, under certain circumstances, increase
the conversion rate for holders who elect to convert their Notes in
connection with such corporate event or notice of redemption.
The Notes will be convertible based on an initial conversion
rate of 29.1375 shares of SolarEdge’s common stock per $1,000
principal amount of Notes (equivalent to an initial conversion
price of approximately $34.32 per share of common stock, which
represents a conversion premium of approximately 30% to the last
reported sale price of SolarEdge’s common stock on the Nasdaq
Global Select Market on June 24, 2024). Prior to the close of
business on the business day immediately preceding April 1, 2029,
the Notes will be convertible at the option of the holders of the
Notes only upon the satisfaction of specified conditions and during
certain periods. On or after April 1, 2029 until the close of
business on the second scheduled trading day immediately prior to
the maturity date, the Notes will be convertible, at the option of
the holders of Notes, at any time regardless of such conditions.
The Notes will be convertible into cash, shares of common stock of
SolarEdge or a combination thereof, with the form of consideration
to be determined at SolarEdge’s election.
When issued, the Notes will be SolarEdge’s senior unsecured
obligations and will rank senior in right of payment to any of
SolarEdge’s unsecured indebtedness that is expressly subordinated
in right of payment to the Notes; equal in right of payment to any
of SolarEdge’s unsecured indebtedness that is not so subordinated;
effectively junior in right of payment to any of SolarEdge’s
secured indebtedness to the extent of the value of the assets
securing such indebtedness; and structurally junior to all
indebtedness and other liabilities (including trade payables) of
SolarEdge’s subsidiaries.
SolarEdge estimates that the net proceeds from the Offering will
be approximately $293.2 million (or approximately $337.2 million if
the initial purchasers exercise their option to purchase additional
Notes in full), after deducting fees and estimated expenses.
SolarEdge intends to use approximately $25.2 million of the net
proceeds from the Offering to pay the cost of the capped call
transactions (as defined below). SolarEdge intends to use the
remainder of the net proceeds from the Offering to repurchase a
portion of its outstanding 0.000% Convertible Notes due 2025 (the
“2025 Notes”) and for general corporate purposes. If the initial
purchasers exercise their option to purchase additional Notes,
SolarEdge expects to use a portion of the net proceeds from the
sale of the additional Notes to enter into additional capped call
transactions with the option counterparties and the remainder to
repurchase an additional portion of its outstanding 2025 Notes and
for general corporate purposes.
Holders of the 2025 Notes that are repurchased in the concurrent
repurchases described above may purchase shares of SolarEdge’s
common stock in the open market to unwind any hedge positions they
may have with respect to the 2025 Notes. These activities may
increase (or reduce the size of any decrease in) the trading price
of SolarEdge’s common stock and the initial conversion price of the
Notes.
In connection with the pricing of the Notes, SolarEdge
anticipates entering into capped call transactions (the “capped
call transactions”) with certain of the initial purchasers or their
respective affiliates (the “option counterparties”). The capped
call transactions are expected generally to reduce the potential
dilution to SolarEdge’s common stock upon any conversion of the
Notes and/or offset any cash payments SolarEdge 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
initially equal to approximately $48.84 per share (which represents
a premium of approximately 85% over the last reported sale price of
the common stock on the Nasdaq Global Select Market on June 25,
2024), subject to certain adjustments under the terms of the capped
call transactions. If the initial purchasers exercise their option
to purchase additional Notes, SolarEdge expects to enter into
additional capped call transactions with the option
counterparties.
In connection with plans to establish their initial hedges of
the capped call transactions, the option counterparties or their
respective affiliates expect to purchase shares of SolarEdge’s
common stock and/or enter into various derivative transactions with
respect to SolarEdge’s common stock concurrently with or shortly
after the pricing of the Notes. This activity could increase (or
reduce the size of any decrease in) the market price of SolarEdge’s
common stock or the Notes at that time.
In addition, the option counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to SolarEdge’s common
stock and/or purchasing or selling SolarEdge’s common stock or
other securities of SolarEdge in secondary market transactions
following the pricing of the Notes and prior to the maturity of the
Notes (and are likely to do so during the observation period for
conversions of the Notes following April 1, 2029 and, to the extent
that SolarEdge unwinds a corresponding portion of the capped call
transactions, following an early conversion of the Notes or
repurchase or redemption of the Notes). This activity could also
cause or avoid an increase or a decrease in the market price of
SolarEdge’s common stock or the Notes, which could affect the
ability of holders to convert the Notes and, to the extent the
activity occurs during any observation period related to a
conversion of the Notes, it could affect the number of shares and
value of the consideration that a holder will receive upon
conversion of its Notes.
The Notes were offered only to persons reasonably believed to be
qualified institutional buyers pursuant to Rule 144A under the
Securities Act. The offer and sale of the Notes and any shares of
common stock of SolarEdge issuable upon conversion of the Notes, if
any, have not been, and will not be, registered under the
Securities Act or the securities laws of any other jurisdiction,
and unless so registered, the Notes and such shares, if any, may
not be offered or sold in the United States except pursuant to an
applicable exemption from such registration requirements.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any offer or
sale of, the Notes (or any shares of common stock of SolarEdge
issuable upon conversion of the Notes) in any state or jurisdiction
in which the offer, solicitation, or sale would be unlawful prior
to the registration or qualification thereof under the securities
laws of any such state or jurisdiction.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified as such
because the statements include information, among other things,
concerning the satisfaction of customary closing conditions with
respect to the Offering and capped call transactions and the
anticipated use of the net proceeds of the Offering. These
forward-looking statements are often characterized by the use of
words such as “may,” “should,” “will,” “intend,” “expect,”
“believe,” “anticipate” or other words of similar import.
The forward-looking statements contained in this press release
are only predictions based on SolarEdge’s current expectations and
SolarEdge’s projections about future events. These forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause SolarEdge’s actual results, levels of
activity, performance or achievements (including in relation to the
Offering and use of the net proceeds of the Offering) to be
materially different from those expressed or implied by the
forward-looking statements. Given these factors, you should not
place undue reliance on these forward-looking statements. These
factors include, but are not limited to, the matters discussed in
the section entitled “Risk Factors” of SolarEdge’s Annual Report on
Form 10-K for the year ended December 31, 2023, filed on February
26, 2024, Quarterly Report on Form 10-Q for the quarter ended March
31, 2024, filed on May 9, 2024, Current Reports on Form 8-K and
other reports filed with the Securities Exchange Commission. All
forward-looking statements included in this release are given only
as at the date hereof and SolarEdge assumes no obligation, and
disclaims any duty, to update the forward-looking statements in
this release.
You should not rely upon forward-looking statements as
predictions of future events. The events and circumstances
reflected in the forward-looking statements may not be achieved or
occur. SolarEdge cannot guarantee future results, levels of
activity, performance or achievements. SolarEdge is under no duty
to update any of these forward-looking statements after the date of
this release or to conform these statements to actual results or
revised expectations.
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version on businesswire.com: https://www.businesswire.com/news/home/20240626215784/en/
Investor Contacts SolarEdge Technologies, Inc. JB Lowe, Head of
Investor Relations investors@solaredge.com
or
Sapphire Investor Relations, LLC Erica Mannion or Michael Funari
investors@solaredge.com
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