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Envista greenshoe lifts five-year convertibles to $517.5 million
By Sarah Lizee
Olympia, Wash., May 26 – Initial purchasers for Envista Holdings Corp.’s five-year convertible notes exercised their $67.5 million greenshoe in full on Thursday, bringing the total deal size to $517.5 million, according to an 8-K filing with the Securities and Exchange Commission.
As previously reported, the company priced an upsized $450 million of the convertibles after the market close on May 18 at par with a coupon of 2.375% and an initial conversion premium of 32.5%, according to a company news release.
Pricing came at the cheap end of initial price talk for a coupon of 1.875% to 2.375% and at the midpoint of talk for an initial conversion premium of 30% to 35%, according to a market source.
J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and BofA Securities Inc. are joint bookrunners for the Rule 144A offering.
The initial size of the deal was $400 million with a greenshoe of $60 million.
The notes are non-callable until June 1, 2023 and then subject to a 130% hurdle.
They will be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing of the notes, the company will enter into capped call transactions with a cap price of $23.79, which represents a premium of 50% over the last reported sales price of stock.
Net proceeds are expected to be $502.3 million with the greenshoe exercised in full.
About $18 million of the net proceeds will cover the cost of the call spread with the remaining amount to be used for general corporate purposes, which may include cost reduction and strategic growth initiatives, working capital, refinancing debt, or the pursuit of acquisitions.
Envista is a Brea, Calif.-based holding company that provides dental consumable, equipment and services through its subsidiaries.
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