II-VI Incorporated (NASDAQ:IIVI) today announced its intention to offer, subject to market conditions and other factors, $300.0 million aggregate principal amount of convertible senior notes due 2022 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”). II-VI also intends to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $45.0 million aggregate principal amount of the notes.

The notes will be unsecured, senior obligations of II-VI, and interest will be payable semi-annually in arrears. The notes will be convertible into cash, shares of II-VI’s common stock, or a combination thereof, at II-VI’s election. The interest rate, initial conversion rate, repurchase rights and other terms of the notes are to be determined upon pricing of the offering by negotiations between II-VI and the initial purchasers of the notes.

II-VI expects to use up to $50.0 million of the net proceeds from the offering to repurchase shares of its common stock from purchasers of the notes in the offering in privately negotiated transactions effected through one of the initial purchasers or its affiliate as II-VI’s agent concurrently with the offering.

II-VI intends to use the remainder of the net proceeds from the offering for general corporate purposes, which may include repayment, redemption or refinancing of indebtedness, capital expenditures, investments in or loans to subsidiaries and joint ventures, funding of possible acquisitions or strategic transactions, working capital, satisfaction of other obligations and additional repurchases of II-VI’s outstanding equity securities.

Any repurchases of II-VI’s common stock, including repurchases from purchasers of notes in the offering, could increase, or prevent a decrease in, the market price of II-VI’s common stock or the notes. In the case of repurchases effected concurrently with the offering, this activity could affect the market price of our common stock concurrently with, or shortly after, the pricing of the notes, and could result in a higher effective conversion price for the notes.

Neither the notes nor the shares of common stock issuable upon conversion of the notes, if any, have been, nor will be, registered under the Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful.

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