Owens & Minor launches tender offers for up to $240 million notes

By Marisa Wong

Los Angeles, June 5 – Owens & Minor, Inc. said it has begun offers to purchase for cash its outstanding senior notes from two series for a maximum aggregate purchase price, excluding accrued interest, of up to $240 million.

Owens & Minor is offering to purchase the following notes, listed in order of acceptance priority level:

• $233,089,000 outstanding 3 7/8% senior notes due 2021 (Cusip: 690732AD4) for a total consideration of $1,000 per $1,000 principal amount; and

• $275 million outstanding 4 3/8% senior notes due 2024 (Cusip: 690732AE2), subject to a tender sub-cap of $15 million, for a total consideration of $900 per $1,000 principal amount.

The total consideration includes an early tender premium of $50 per $1,000 of notes tendered prior to 5 p.m. ET on June 18, the early tender time.

Holders tendering after the early tender time will only be eligible to receive the tender offer consideration, which is the total consideration less the early tender premium.

The tender offers will expire at 11:59 p.m. ET on July 2.

All holders of notes tendered and accepted for purchase will also receive accrued interest to but excluding the applicable settlement date.

The early settlement date is expected to be June 22, and final settlement is expected to occur on July 6.

As part of the tender offer for the 2021 notes, the company is also soliciting consents to proposed amendments that would, among other things, remove some covenants and events of default contained in the indenture governing the 2021 notes.

Adoption of the proposed amendments requires the consent of holders of a majority of the outstanding principal amount of the 2021 notes. Each holder tendering 2021 notes under the tender offer must also deliver a consent to the proposed amendments. Holders may not deliver consents without also tendering their notes.

Tenders may be withdrawn and, for the 2021 notes, consents may be revoked prior to 5 p.m. ET June 18.

The company said it reserves the right, but is under no obligation, to increase the maximum aggregate purchase price or the 2024 notes sub-cap at any time.

If the overall offer cap is exceeded by the early tender time, the company will not accept for purchase any notes tendered after the early tender time and will accept for purchase, subject to the 2024 series sub-cap, early tendered notes according to acceptance priority levels and subject to proration.

The tender offers are not conditioned on the tender of any minimum principal amount of notes of any series nor on the delivery of a number of consents required to amend the indenture for the 2021 notes.

However, the tender offers and consent solicitation are conditioned on the company completing the sale of its Movianto business and certain support functions in its Dublin office to Walden Group SAS or an affiliate and the receipt of cash proceeds of at least $133 million.

The company said it intends to fund the tender offers with cash on hand, the proceeds of the Movianto sale or funds from its accounts receivable securitization program.

If the tender offers are not completed, or if the company pays less than the maximum aggregate purchase price for notes accepted for purchase under the offers, then the company may use the remaining amount of proceeds from the Movianto sale originally dedicated to the tender offers to repay or retire other outstanding debt.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) is the dealer manager and solicitation agent. D.F. King & Co., Inc. (866 796-6898 or omi@dfking.com) is the tender and information agent.

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