MTS Systems launches $100 million of tangible equity units

By Rebecca Melvin

New York, June 7 – MTS Systems Corp. plans to price $100 million of tangible equity units, or 1 million units at $100 each, according to a news release.

MTS is also pricing 1.5 million shares of common stock.

J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are serving as the joint bookrunning managers for the common stock and tangible equity units offerings, which are registered.

In connection with the pricing of the tangible equity units, the company expects to enter into capped call transactions with affiliates of JPMorgan and Wells Fargo. The capped call transactions are expected to reduce potential dilution to the company’s common stock upon settlement of the purchase contracts, with such reduction subject to a cap.

A portion of the proceeds of the tangible equity units will be used to fund the cost of the capped call transactions, and remaining proceeds will partially fund the acquisition of PCB Group Inc.

If the acquisition of PCB is not completed, the company intends to use the proceeds from the offerings for general corporate purposes, including strategic investments and acquisitions.

The company may elect to redeem the equity units if the PCB acquisition is not completed.

MTS is an Eden Prairie, Minn.-based supplier of high-performance test systems and position sensors. PCB is a Depew, N.Y.-based designer, manufacturer and distributor of sensor technologies.

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