Kinetic Concepts announces make-whole conversion for 3.25% notes

By Marisa Wong

Madison, Wis., Nov. 4 - Kinetic Concepts, Inc. gave notice to holders of its 3.25% convertible senior notes due 2015 that the notes are convertible beginning Nov. 4 in connection with a merger.

The merger of Chiron Merger Sub, Inc., a wholly owned subsidiary of Chiron Holdings, Inc., into Kinetic Concepts was completed on Friday and constitutes a make-whole fundamental change under the indenture governing the senior notes. The merger was first announced in July.

Under the terms of the indenture, there will be a make-whole adjustment to the conversion rate. Using Nov. 4 as the closing date of the merger and a merger consideration of $68.50 per share, to which holders of Kinetic Concepts' common stock were entitled, the conversion rate will be increased by 1.7834 shares of common stock per $1,000 principal amount of notes.

The notes remain convertible until 5 p.m. ET on the business day preceding the fundamental change purchase date, which will be specified by the company in a separate notice within 20 days. The fundamental change purchase date will be between 20 and 35 calendar days from Friday.

Holders also have the option of requiring the company to repurchase all or a portion of their notes on the fundamental change purchase date at par plus accrued interest to the purchase date. Holders who exercise this right will not be allowed to convert their notes.

Kinetic Concepts is a San Antonio-based medical technology company.

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