SFBC $100 million convertible talked at 2.25%-2.75% yield, up 30%-35%

Nashville, Aug. 3 - SFBC International Inc. launched $100 million of 20-year convertible notes talked to yield 2.25% to 2.75% with a 30% to 35% initial conversion premium for Thursday's business. It will be sold on swap with up to $25 million of proceeds going to buy back stock from short sellers participating in the convertible offering.

UBS Investment Bank is sole bookrunner of the Rule 144A deal.

The senior notes will be non-callable for five years and will have puts in years five, 10 and 15. There is full dividend protection via an adjustment to the conversion ratio and cash takeover protection by way of a premium make-whole.

There is no contingent conversion trigger but a net share settlement provision that would diminish the impact of dilution.

There is a $15 million greenshoe available.

SFBC is a Miami-based biotech firm that provides specialized drug development services to branded pharmaceutical, biotech and generic drug companies, as well as early clinical development services primarily for Phase I and Phase II clinical trials and bioanalytical lab services.

After the share repurchases, SFBC said it plans to use proceeds for general corporate purposes and acquisitions.

Last week, SFBC acquired Taylor Technology Inc., based in Princeton, N.J., which offers quantitative bioanalytical mass spectrometry services primarily in pre-clinical and Phases I - IV of drug development for the pharmaceutical industry. SFBC paid $20.9 million - $16.92 million in cash and $3.98 million in restricted common stock.

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