| Item 1.01 | Entry into a Material Definitive Agreement. |
On May 22, 2019, Veoneer, Inc. (the “Company”) announced the pricing of its concurrent registered public offerings of 24,000,000 shares of the Company’s common stock and $180,000,000 aggregate principal amount of the Company’s 4.00% Convertible Senior Notes due 2024.
This represents an increase from the initially announced offering size for the common stock offering of $350 million (with an initially announced overallotment option size of $52.5 million) and an increase from the initially announced offering size for the convertible notes offering of $150 million (with an initially announced overallotment option size of $22.5 million).
Registered Public Offering of Common Stock
On May 22, 2019, the Company entered into an underwriting agreement (the “Common Stock Underwriting Agreement”) with Morgan Stanley & Co. LLC, as representative of the underwriters named therein (the “Common Stock Underwriters”), related to the issuance and sale of 24,000,000 shares of its common stock (the “Firm Shares”) in a public offering (the “Common Stock Offering”) registered pursuant to the Company’s registration statement on FormS-1 (FileNo. 333-231607) under the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to the Common Stock Underwriting Agreement, the Company also granted the Common Stock Underwriters an option to purchase, through June 21, 2019, up to an additional 3,600,000 shares (the “Option Shares,” and together with the Firm Shares, the “Shares”), solely to cover over-allotments. The Shares are being offered to the public at a price of $17.50 per share. The Common Stock Offering is scheduled to close on May 28, 2019, subject to customary closing conditions.
The Common Stock Underwriters will receive discounts and commissions of $0.6475 per share (3.70% of the gross cash proceeds received by the Company from the sale of the Shares in the Offering). The Company expects to receive approximately $402.8 million, or approximately $463.5 million if the Common Stock Underwriters exercise their option to purchase the Option Shares in full, in net proceeds from the Common Stock Offering after deducting the underwriting discounts and estimated offering expenses payable by the Company.
The Common Stock Underwriting Agreement contains customary representations, warranties and covenants of the Company. It also provides for customary indemnification for losses or damages arising out of or in connection with the Common Stock Offering. In addition, pursuant to the terms of the Common Stock Underwriting Agreement, each director and executive officer of the Company entered into an agreement with the Common Stock Underwriters not to sell, transfer or otherwise dispose of securities of the Company for 180 days after the closing of the Common Stock Offering, subject to certain exceptions.
The foregoing description of the Common Stock Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Common Stock Underwriting Agreement, a copy of which is attached hereto as Exhibit 1.1 and is incorporated by reference into this Item 1.01.
Registered Public Offering of Convertible Senior Notes
On May 22, 2019, the Company entered into an underwriting agreement (the “Notes Underwriting Agreement,” and together with the Common Stock Underwriting Agreement, the “Underwriting Agreements”) with Morgan Stanley & Co. LLC, as representative of the underwriters named therein (the “Notes Underwriters”), related to the issuance and sale of $180,000,000 aggregate principal amount of its 4.00% Convertible Senior Notes due 2024 (the “Firm Notes”) in a public offering (the “Notes Offering,” and together with the Common Stock Offering, the “Offerings”) registered pursuant to the Company’s registration statement on FormS-1 (FileNo. 333-231609) under the Securities Act. In addition, the Company granted the Notes Underwriters an option to purchase, through June 21, 2019, up to an additional $27,000,000 aggregate principal amount of notes (the “Option Notes,” and together with the Firm Notes, the “Notes”), solely to cover over-allotments. The Notes Offering is scheduled to close on May 28, 2019, subject to customary closing conditions.
Subject to the terms and conditions in the Notes Underwriting agreement, the Notes Underwriters have severally agreed to purchase the Firm Notes (and, to the extent the related option is exercised, the Option Notes) from the Company at a 2.75% discount of the principal amount of the Notes. The Company expects to receive approximately $174.2 million, or approximately $200.4 million if the Notes Underwriters exercise their option to purchase the Option Notes in full, in net proceeds from the Notes Offering after deducting the underwriting discount and estimated offering expenses payable by the Company.
