MTS greenshoe exercise increases tangible equity units to $115 million

By Angela McDaniels

Tacoma, Wash., June 17 – The underwriters of MTS Systems Corp.’s three-year mandatory tangible convertible equity units exercised their $15 million over-allotment option in full, increasing the size of the issue to $115 million from $100 million.

As previously reported, the company priced 1 million units at $100 each on June 9 with a distribution rate of 8.75% and a premium over the threshold appreciation price of 20%. The final installment payment date will be July 1, 2019.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the joint bookrunners for the registered offering.

MTS also priced an upsized 1.65 million shares of common stock at $42.00 each. The stock offering settled Wednesday.

In connection with the sale, the company entered into capped call transactions with affiliates of JPMorgan and Wells Fargo with an initial cap price of $58.80 per share of common stock, representing a premium of about 40% from the issuer’s perspective.

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.

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

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