New York, Aug. 22 - Wright Medical Group, Inc. priced an upsized $260 million offering of cash convertible senior notes due 2017 with a 2% coupon and a 27.5% initial conversion premium after the close Wednesday.
The deal was increased from the originally announced $200 million and priced in line with revised talk for a 2% coupon and a 27.5% initial conversion premium. Talk started at 2.25% to 2.75% with an initial conversion premium of 22.5% to 27.5%, according to market sources.
The conversion price is $25.44 and the conversion ratio 39.3140.
There is contingent conversion for cash until Feb. 15, 2017 and the notes are freely convertible after that date until maturity on Aug. 15, 2017. The contingent conversion threshold is 130%.
The offering has a $40 million greenshoe, increased from the original $30 million.
J.P. Morgan Securities LLC is the bookrunner of the Rule 144A offering, with SunTrust Robinson Humphrey Inc. and US Bancorp acting as co-managers.
The bonds are non-callable for life with no puts.
Wright Medical entered into privately negotiated convertible note hedge and warrant transactions that raise the effective conversion level to a 50% premium.
About $130 million of the proceeds will be used to pay an outstanding term loan under Wright Medical's senior credit facility and a portion of the proceeds will fund the cost of the convertible note hedge transactions.
The balance of the proceeds will be used to fund up to $30 million of the repurchase of the company's 2014 convertible senior notes and for general corporate purposes, including acquisitions.
Wright Medical is an Arlington, Tenn.-based orthopedic medical device company.
| Issuer: | Wright Medical Group Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $260 million
|
| Greenshoe: | $40 million
|
| Maturity: | Aug. 15, 2017
|
| Coupon: | 2%
|
| Initial conversion premium: | 27.5%
|
| Conversion price: | $25.44
|
| Conversion ratio: | 39.3140
|
| Contingent conversion: | Subject to 130% hurdle until Feb. 25, 2017
|
| Calls: | Non-callable
|
| Puts: | None
|
| Pricing date: | Aug. 22, after close
|
| Settlement: | Aug. 31
|
| Bookrunner: | J.P. Morgan Securities LLC
|
| Co-managers: | SunTrust Robinson Humphrey Inc., US Bancorp
|
| Distribution: | Rule 144A
|
| Hedging: | Convertible note hedge and warrant transactions that raise effective conversion premium to 50%
|
| Stock symbol: | Nasdaq: WMGI
|
| Stock price: | $19.95 at close on Aug. 22
|
| Market capitalization: | $772 million
|
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