8-KMaterial AgreementsFinancial EventsSecurities & Listing+1

TERADYNE, INC 8-K Report, Material Agreement (Apr 6, 2009)

Filed April 6, 2009For Securities:TER

Summary

Teradyne, Inc. (TER) announced on April 6, 2009, the completion of a $190 million public offering of 4.50% convertible senior notes due 2014. This offering, underwritten by Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, aims to strengthen the company's financial position. The notes are convertible into Teradyne common stock at an initial conversion price of approximately $5.4750 per share, representing a 25% premium over the stock's closing price on March 31, 2009. Concurrently with the note offering, Teradyne entered into a convertible note hedge transaction to mitigate potential dilution and a warrant transaction. The note hedge covers approximately 34.7 million shares of common stock, while the warrants, with a strike price of $7.6650, could be dilutive if the stock price rises significantly above this level. The net cost of these hedging and warrant transactions was approximately $21.7 million. The company also noted that the underwriter's hedging activities could influence the stock price.

Key Highlights

  • 1Completed a $190 million offering of 4.50% convertible senior notes due 2014.
  • 2Notes are convertible into Teradyne common stock at an initial price of $5.4750 per share, a 25% premium to the March 31, 2009 closing price.
  • 3Entered into a convertible note hedge to reduce potential dilution from note conversions.
  • 4Engaged in a separate warrant transaction with a strike price of $7.6650 per share.
  • 5The net cost of the hedge and warrant transactions was approximately $21.7 million.
  • 6The underwriter's hedging activities could impact Teradyne's stock price.

Frequently Asked Questions

This Form 8-K filing reports on Teradyne, Inc.'s entry into material definitive agreements related to a public offering of its convertible senior notes and related hedging transactions.

The notes have a principal amount of $190 million, bear a 4.50% annual interest rate, mature on March 15, 2014, and are convertible into Teradyne common stock at an initial conversion price of approximately $5.4750 per share.

Teradyne has entered into a convertible note hedge transaction designed to reduce the potential dilution to its common stock upon conversion of the notes. However, a separate warrant transaction could still have a dilutive effect.

The underwriter and its affiliates may engage in hedging activities, including buying or selling Teradyne's stock or other securities, which could influence the stock price, potentially increasing it or preventing a decline, but also could adversely impact its value.