MoFo News Item

MoFo Represents CSFB in Emulex's $450M Private Placement

1/22/2004
By Brenda Sandburg and Renee Deger, The Recorder

A team of Morrison & Foerster lawyers represented underwriter Credit Suisse First Boston and Deutsche Bank Securities in a $450 million private placement of Emulex Corp.'s convertible subordinated notes due in 2023.

The notes will accrue interest at an annual rate of 0.25 percent and will be convertible, at the option of the holder and subject to certain conditions, at an initial price of $43.20 per share. The figure represents a 60 percent conversion premium based on the closing bid price of $27 of Emulex common stock on Dec. 8, the day before the notes were priced.

"This transaction was completed very quickly, and all the parties were able to band together to make it happen," said Justin Bastian, a partner in MoFo's Palo Alto office who led the team representing the underwriters.

Costa Mesa-based Emulex is the world's largest developer and supplier of storage networking host bus adapters, which enable servers to connect to storage networks. The company sells its products primarily to equipment manufacturers, including IBM Corp. and Hewlett-Packard Co. Its 2003 sales totaled $308.2 million.

Emulex said in a release that it intends to use the net proceeds from the sale of the notes to repurchase up to 1.5 million shares of the company's common stock, repurchase all or a portion of its outstanding 1.75 percent convertible notes due in 2007 and repay the approximately $174 million it borrowed in connection with its acquisition of Vixel Corp. in November.

MoFo partners Kathryn Johnstone and M. Ellen Robb and associates Brandon Parris, Alanna Goates, Kevin Cops and Kelly Logue assisted Bastian on the deal.

Robert Steinberg, a partner in the Los Angeles office of Jeffer, Mangels, Butler & Marmaro, represented Emulex along with partners Stephen Goldstein, Nicholas Freud and Catherine DeBono Holmes and associate Thomas Bacon.

Reprinted from The Recorder, January 22, 2004. This article first appeared on the web on law.com.

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