Onto Innovation Inc. (NYSE: ONTO) announced the pricing of its private offering of $1.3 billion in convertible senior notes due 2031, increasing the size from a previously announced $1.1 billion.

The notes carry a 0.00% interest rate and have an initial conversion price of approximately $381.80 per share, representing a 50% premium to the company's stock price of $254.53 on the New York Stock Exchange on May 18, 2026. The offering is expected to close on May 21, 2026.

Initial purchasers received an option to buy an additional $200 million in notes within 13 days of issuance. Onto Innovation estimates net proceeds of approximately $1.274 billion, or $1.470 billion if the additional notes are purchased.

The company plans to use approximately $77.1 million for capped call transactions, about $205 million to repurchase 0.8 million shares at $254.53 per share, and the remainder for general corporate purposes, including potential financing for its announced acquisition of 27% of Rigaku Holdings Corporation.

The notes mature on June 1, 2031, and holders may convert them under certain conditions before March 1, 2031, and at any time thereafter until maturity. The initial conversion rate is 2.6192 shares per $1,000 principal amount of notes.

Onto Innovation entered into capped call transactions with an initial cap price of $509.06 per share, representing a 100% premium to the May 18 stock price. These transactions are designed to reduce potential dilution from note conversions.

The notes will be redeemable at the company's option starting June 6, 2029, under certain conditions including when the stock price exceeds 130% of the conversion price for a specified period.

The offering targets qualified institutional buyers under Rule 144A of the Securities Act of 1933.