Key Takeaways:
Viavi Solutions Inc. (NASDAQ: VIAV) priced a public offering of 11,111,111 shares at $45.00 apiece, sending its stock down more than 7% in post-market trading.
The details were confirmed in a press release late Tuesday, which outlined the terms of the underwritten public offering.
The offering is expected to generate gross proceeds of approximately $500 million before underwriting fees. Viavi intends to use the net proceeds to repay the $450 million aggregate principal amount of its Term Loan B. Any excess net proceeds will be used for working capital and other general corporate purposes, the company said.
The offering, which will dilute existing shareholders, caused the stock to fall 7.1% to $45.79 in after-hours trading. The move comes after the stock had nearly tripled in value over the past year, closing at $49.28 in the regular session.
Stifel and Needham & Company are acting as joint book-running managers for the proposed offering. UBS Investment Bank is also acting as a bookrunner. The underwriters have a 30-day option to purchase up to an additional 1,666,666 shares from Viavi at the public offering price.
The offering aims to strengthen Viavi's balance sheet by eliminating a significant portion of its debt. Investors will now watch for the closing of the offering and how the reduced debt load impacts the company's financial flexibility on future earnings calls.
This article is for informational purposes only and does not constitute investment advice.
