Komag plans $70 million convertible offering

By Ronda Fears

Nashville, Nov. 3 - Komag Inc. filed a registration statement to offer $70 million of 20-year convertible notes and 6 million shares of common stock via bookrunner Bear Stearns & Co. Inc.

Pricing will be scheduled once the registrations clear the Securities and Exchange Commission.

There is a $10.5 million greenshoe available on the convertible offering.

The 20-year notes will be non-callable for seven years, with puts in years seven, 10 and 15, according to the prospectus filed at the SEC.

Of the 6 million shares of common stock being registered, the company is issuing 3 million, the remainder being sold by selling shareholders.

The company expects to use proceeds to redeem its $114 million outstanding senior secured notes due 2007 and for general corporate purposes.

On Friday, Komag also called for the redemption on Dec. 2 of its junior secured notes due 2007, with about $8.17 million outstanding.

U.S. Bancorp Piper Jaffray Inc. is joint lead manager for the convertibles.

Needham & Co. Inc. and Thomas Weisel Partners LLC are co-managers.

Komag, based in San Jose, Calif., designs, manufactures and markets thin-film media disks that are built into disk drives, the primary storage medium for digital data.

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