Merit Medical greenshoe exercised in full, lifts 3% convertible notes to $747.5 million

By William Gullotti

Buffalo, N.Y., Dec. 8 – Underwriters for Merit Medical Systems Inc.’s 3% five-year convertible notes fully exercised the $97.5 million greenshoe on Friday, lifting the size of the issue to $747.5 million, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, the company initially sold $650 million of the notes after the market close on Dec. 5 at par with an initial conversion premium of 32.5%. Before being upsized, the size of the offering was originally expected to be $550 million with a greenshoe of $82.5 million.

Pricing came at the rich end of tightened talk for a coupon of 3% to 3.25% and in line with tightened talk for an initial conversion premium of 32.5%. Initial price talk was for a coupon of 3.5% to 4% and an initial conversion premium of 27.5% to 32.5%.

J.P. Morgan Securities LLC (lead left), Piper Sandler Co. and Wells Fargo Securities LLC were bookrunners for the Rule 144A offering.

The notes are non-callable for three years and then subject to a 130% hurdle.

There is takeover and dividend protection.

The notes will be settled in cash up to the principal amount with any remaining amounts to be settled in cash, shares or a combination of both at the company’s option.

Net proceeds will be $725.1 million with the greenshoe exercised.

In connection with the offering, the company entered into capped call transactions with a cap price of $114.68.

Approximately $57.9 million of net proceeds will be used to cover the cost of the call spread with remaining amounts to be used for general corporate purposes, which may include the repayment or reduction of debt or investments in and acquisitions of other companies, products or technologies.

Merit Medical is a South Jordan, Utah-based medical device manufacturer.

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