Volcano Corporation To Offer $350 Million Convertible Senior Notes Due 2017

 Volcano Corporation To Offer $350 Million Convertible Senior Notes Due 2017

PR Newswire

SAN DIEGO, Dec. 3, 2012

SAN DIEGO, Dec. 3, 2012 /PRNewswire/ -- Volcano Corporation (NASDAQ: VOLC)
today announced its intention to offer, subject to market and other
conditions, $350 million principal amount of convertible senior notes due
December 1, 2017 in an offering registered under the Securities Act of 1933,
as amended. Prior to August 7, 2017, the notes will be convertible only upon
certain circumstances and during certain periods. Upon conversion, holders
will receive up to the principal amount of the notes in cash and any excess
conversion value in shares of Volcano's common stock. Volcano also expects to
grant the underwriters of the offering an option to purchase up to $52.5
million aggregate principal amount of additional notes to cover
over-allotments.

The notes will be general senior unsecured obligations of Volcano and will pay
interest semi-annually. The interest rate, conversion rate, offering price and
other terms will be determined at the time of pricing of the offering. Volcano
expects to use a portion of the net proceeds of the offering of the notes to
pay the costs of the convertible note hedge transactions described below,
taking into account the proceeds of the warrant transactions described below,
and may use up to approximately $50.0 million of the net proceeds from the
offering to fund repurchases of its outstanding 2.875% Convertible Senior
Notes due 2015 (the "2015 Notes"). Volcano may also use a portion of the net
proceeds to invest in or acquire complementary products, businesses or
technologies. The remaining net proceeds are intended for working capital and
general corporate purposes.

In connection with any repurchases of Volcano's outstanding 2015 Notes,
Volcano expects to terminate the convertible note hedge transactions and
warrant transactions it entered into at the time of the offering of the 2015
Notes in an amount corresponding to the portion of the 2015 Notes so
repurchased, and Volcano expects to receive from its counterparty to these
transactions a net payment resulting from such partial termination, the amount
of which will depend on many factors, including, without limitation, the
market price of Volcano's common stock and overall market conditions at the
time these transactions are partially terminated. Volcano has been advised by
its counterparty to these transactions that it or its affiliate does not
expect to unwind its existing hedge positions with respect to these
transactions and will instead use these existing hedge positions in connection
with establishing its initial hedge positions with respect to the convertible
note hedge transactions and warrant transactions entered into in connection
with this offering of notes.

In connection with the pricing of the notes, Volcano expects to enter into
convertible note hedge transactions with one or more of the underwriters
and/or their respective affiliates (the "option counterparties"), which are
expected to reduce the potential dilution with respect to Volcano's common
stock upon conversions of the notes. Volcano also expects to enter into
warrant transactions with the option counterparties, which could have a
dilutive effect on Volcano's common stock to the extent that the market value
per share of Volcano's common stock, as measured under the warrant
transactions, exceeds the strike price of the warrant transactions. If the
underwriters exercise their over-allotment option to purchase additional
notes, Volcano expects to enter into additional convertible note hedge
transactions and additional warrant transactions.

Volcano has been advised that, in connection with establishing their initial
hedge positions with respect to the convertible note hedge transactions and
the warrant transactions, the option counterparties, and/or their affiliates,
expect to enter into various over-the-counter derivative transactions with
respect to Volcano's common stock concurrently with and/or shortly after the
pricing of the notes. These activities could have the effect of increasing,
or limiting a decline in, the market price of Volcano's common stock
concurrently with and/or shortly after the pricing of the notes.

In addition, the option counterparties and/or their affiliates may modify
their hedge positions from time to time prior to conversion, repurchase or
maturity of the notes by entering into and unwinding various over-the-counter
derivative transactions and/or purchasing and selling shares of Volcano's
common stock and/or Volcano's other securities, including the notes and/or
other instruments they may wish to use in connection with such hedging
activities (and are likely to do so during any observation period related to a
conversion of the notes).

J.P. Morgan Securities LLC and Goldman, Sachs & Co. are the joint managers of
the note offering. The notes will be offered and sold under Volcano's shelf
registration statement filed with the Securities and Exchange Commission
("SEC") on September 13, 2010, which was effective upon filing. Before you
invest, you should read the prospectus and preliminary prospectus supplement
to that registration statement and other documents Volcano has filed with the
SEC for more complete information about Volcano and this offering. You may get
these documents at the SEC web site at www.sec.gov. Printed copies of the
preliminary prospectus supplement relating to this offering may also be
obtained by requesting copies from J.P. Morgan Securities LLC, Attention:
Broadridge Financial Solutions at 1155 Long Island Avenue, Edgewood, New York
11717, or by telephone at 866-803-9204; or from Goldman, Sachs & Co.,
Attention: Prospectus Department at 200 West Street, New York, New York 10282,
or by telephone at 866-471-2526, or by e-mailing
prospectus-ny@ny.email.gs.com.

This press release does not constitute an offer to sell or the solicitation of
an offer to buy securities, nor shall there be any sales of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any
jurisdiction.

About Volcano Corporation

Volcano Corporation is revolutionizing the medical device industry with a
broad suite of technologies that make imaging and therapy simpler, more
informative and less invasive. Our products empower physicians around the
world with a new generation of analytical tools that deliver more meaningful
information—using light and sound as the guiding elements. Founded in
cardiovascular care and expanding into other specialties, Volcano is changing
the assumption about what is possible in improving patient outcomes by
combining imaging and therapy together.

Forward-Looking Information

This press release includes forward-looking statements, within the meaning of
the U.S. Private Securities Litigation Reform Act of 1995, that are subject to
risks, uncertainties and other factors, including regarding the offering
described above, the current market demand for these types of securities and
the securities of Volcano and the negotiations between Volcano and the
underwriters due to changes in our stock price, corporate or other market
conditions. These risks, uncertainties and other factors could cause actual
results to differ materially from those referred to in the forward-looking
statements. The reader is cautioned not to rely on these forward-looking
statements. Other risks that could impact the offering or Volcano's business
are described in detail in the preliminary prospectus relating to the proposed
offering, as filed with the SEC, as well as in Volcano's subsequent filings
made with the SEC. Undue reliance should not be placed on forward-looking
statements, which speak only as of the date they are made. Volcano undertakes
no obligation to update any forward-looking statements to reflect new
information, events or circumstances after the date they are made, or to
reflect the occurrence of unanticipated events.

SOURCE Volcano Corporation

Website: http://www.volcanocorp.com
Contact: John Dahldorf, Chief Financial Officer, Volcano Corporation,
+1-858-720-4020, or Neal B. Rosen, +1-650-458-3014
 
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