Encore Medical sets pricing in tender for 9¾% notes

New York, Oct. 27 - Encore Medical Corp. set pricing in its tender offer and consent solicitation for all of the outstanding 9¾% senior subordinated notes due 2012 of Encore Medical IHC, Inc.

For each $1,000 principal amount, the company will pay $1,123.82, which includes a consent payment of $30.00.

Encore also said that all $165 million of the notes had been tendered by the consent deadline.

As previously announced, the tender offer is being conducted in connection with Encore's merger with Grand Slam Holdings, LLC and Grand Slam Acquisition Corp., affiliates of The Blackstone Group.

The consent solicitation expired at 5 p.m. ET on Oct. 26, and the tender offer will end at midnight ET on Nov. 9.

The total consideration for each $1,000 principal amount of the notes was set as the present value of the $1,048.75 redemption price on the first call date of Oct. 1, 2008 plus the present value on the settlement date of interest through the first call date. Each will be determined based on the yield of the 4 5/8% U.S. Treasury due Sept. 30, 2008 plus 50 basis points, less interest up to but excluding the settlement date.

Price was set at 11 a.m. ET on Oct. 27.

The total consideration includes at $30 consent payment for notes tendered before the consent deadline.

Notes tendered after the consent deadline will receive the same amount, less the consent payment.

The company will also pay accrued interest for the notes.

The company is soliciting consents to amend the note indenture to eliminate substantially all restrictive covenants, except some relating to asset sale and change of control offers, and some events of default; modify some provisions relating to the merger and consolidation of Encore; and modify some terms of the defeasance, satisfaction and discharge provisions.

Holders may not tender their notes without delivering consents, and vice versa.

For notes tendered and not withdrawn before the consent deadline, settlement is expected to be the first business day after the price determination date, Nov. 3. For notes tendered after the consent deadline, settlement is expected on Nov. 13.

Settlement is dependent on completion of the merger, receipt of consents from a majority of noteholders.

Banc of America Securities LLC (888 292-0070 or 704 388-9217) is the dealer manager and solicitation agent. D.F. King & Co., Inc. (800 769-7666 or 212 269-5550) is the information agent.

Encore is an orthopedic device company based in Austin, Texas.

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