September 16, 2010 (FinancialWire) (Go to http://www.financialwire.net/?s=ftrdnwswnd for all of today’s featured news.) — Volcano Corp. (NASDAQ: VOLC) has priced an offering of $100 million of 2.875 percent convertible senior notes due September 1, 2015. J.P. Morgan Securities LLC (NYSE: JPM) is the sole manager.

Volcano granted the underwriter of the offering a 13-day option to purchase up to $15 million aggregate principal amount of additional notes. The offering is expected to close on September 20, 2010, subject to customary closing conditions.

Prior to June 1, 2015, the notes will be convertible only upon certain circumstances. Upon conversion, holders will receive up to the principal amount of the notes in cash and any excess conversion value in shares of Volcano's common stock.

The notes will mature on September 1, 2015, unless previously converted in accordance with their terms. The notes will be general senior unsecured obligations of Volcano, and interest will be payable semi-annually in cash at a rate of 2.875 percent per annum on March 1 and September 1 of each year, beginning March 1, 2011.

The initial conversion rate of 33.7339 shares of common stock per $1,000 principal amount of notes is equivalent to a conversion price of around $29.64 per share of common stock, which is 27.5% higher than the closing price of the company's stock on September 14, 2010.

Volcano estimates that net proceeds from the offering will be around $96.1 million, after deducting the underwriter's discounts and estimated transaction expenses associated with the offering and convertible note hedge transaction and the warrant transaction payable by the company.

The company plans to use approximately $8.7 million of the net proceeds from the sale of the notes to pay the cost of the convertible note hedge transaction. The balance of the net proceeds will be used for working capital and for general corporate purposes.  

Volcano said it may also use a portion of the net proceeds to expand its manufacturing capabilities and/or invest in complementary products, technologies or businesses.

California-based Volcano offers a suite of devices designed to facilitate endovascular procedures, enhance the diagnosis of vascular and structural heart disease and guide optimal therapies.

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