LAKE
MARY, Fla., Jan. 20,
2023 /PRNewswire/ -- FARO® Technologies,
Inc. (NASDAQ: FARO) ("FARO") announced today the pricing of
$60 million aggregate principal
amount of its 5.50% convertible senior notes due 2028 (the "Notes")
in a private placement to qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"). FARO expects the offering of the Notes to close
on January 24, 2023, subject to
customary closing conditions. FARO also granted the initial
purchaser of the Notes a 13-day option to purchase up to an
additional $15 million in aggregate
principal amount of Notes.
The Notes will be general, unsecured obligations of FARO, and
interest will be payable semiannually in arrears at a rate of 5.50%
per year on February 1 and
August 1 of each year, beginning on
August 1, 2023. The Notes will mature
on February 1, 2028, unless
repurchased, redeemed or converted prior to such date.
The initial conversion rate is 23.6072 shares of common stock
per $1,000 principal amount of Notes
(equivalent to an initial conversion price of approximately
$42.36 per share of FARO's common
stock, which represents a 20% premium to FARO's closing stock price
on January 19, 2023). Prior to
November 1, 2027, the Notes will be
convertible at the option of holders only upon satisfaction of
certain conditions and during certain periods. On and after
November 1, 2027, the Notes will be
convertible at the option of holders at any time until the close of
business on the second scheduled trading day immediately preceding
the maturity date. Upon conversion of the Notes, FARO will pay or
deliver, as applicable, cash, shares of its common stock or a
combination of cash and shares of its common stock, at FARO's
election.
FARO may redeem for cash all or (subject to certain limitations)
any part of the Notes, at its option, on or after February 5, 2026, if the last reported sale price
of FARO's common stock has been at least 130% of the conversion
price for the Notes then in effect on (1) each of at least 20
trading days (whether or not consecutive) during the 30 consecutive
trading days ending on, and including, the trading day immediately
preceding the date on which FARO sends the related notice of
redemption, and (2) the trading day immediately before the date
FARO sends notice. The redemption price will be 100% of the
principal amount of the Notes to be redeemed, plus accrued and
unpaid interest to, but excluding, the redemption date.
Holders of the Notes will have the right to require FARO to
repurchase for cash all or any portion of their Notes at a
repurchase price equal to 100% of their principal amount, plus any
accrued and unpaid interest, upon the occurrence of a fundamental
change (as defined in the indenture relating to the Notes). FARO,
under certain circumstances, will also be required to increase the
conversion rate for holders who convert their Notes in connection
with a make-whole fundamental change (as defined in the indenture
relating to the Notes) occurring prior to the maturity date. The
definition of make-whole fundamental change includes the calling of
Notes for redemption.
FARO estimates that the net proceeds from this offering will be
approximately $57.7 million (or
approximately $72.2 million if the
initial purchaser exercises its option to purchase additional Notes
in full), after deducting the initial purchaser's discount and
estimated offering expenses. FARO intends to use the net proceeds
from this offering for working capital and other general corporate
purposes.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of
these securities in any jurisdiction in which such an offer,
solicitation or sale would be unlawful. The offer and sale of the
Notes and the shares of common stock 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 the Notes and such shares may not be offered or
sold in the United States without
registration or an applicable exemption from registration
requirements.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are subject to risks and uncertainties, such as statements
about the proposed terms of the Notes, the completion, timing and
size of the proposed offering and the anticipated use of proceeds
from the offering. Statements that are not historical facts or that
describe FARO's plans, beliefs, objectives, projections,
expectations, assumptions, strategies, goals or future events are
forward-looking statements. In addition, words such as "is,"
"will," "intend," "believe," "expect," "may," "might," "would,"
"will," "will be," "future," "strategy," "believe," "plan,"
"should," "could," "seek," "expect," "anticipate," "intend,"
"estimate," "goal," "objective," "project," "forecast," "target"
and similar words identify forward-looking statements.
Forward-looking statements are not guarantees of future performance
and are subject to various known and unknown risks, uncertainties,
and other factors that may cause actual results, performances, or
achievements to differ materially from future results, performances
or achievements expressed or implied by such forward-looking
statements. Consequently, undue reliance should not be placed on
these forward-looking statements. Factors that could cause actual
results to differ materially from what is expressed or forecasted
in such forward-looking statements include, but are not limited to,
those risks detailed in Part I, Item 1A. Risk Factors in FARO's
Annual Report on Form 10-K for the year ended December 31, 2021, and in its Quarterly Report on
Form 10-Q for the quarter ended September
30, 2022. Forward-looking statements in this release
represent FARO's judgment as of the date of this release. FARO
undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events,
or otherwise, unless otherwise required by law.
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SOURCE FARO