Wright Medical lifts convertibles to $260 million, revises talk to 2%, up 27.5% at midpoint

By Rebecca Melvin

New York, Aug. 22 - Wright Medical Group Inc. upsized its planned offering of five-year convertible notes to $260 million and revised price talk to a coupon of 2% and an initial conversion premium of 27.5% at the midpoint of talk, from 2.25% to 2.75% with an initial conversion premium of 22.5% to 27.5%, according to market sources.

Initially the offering was going to be $200 million in size with a $30 million greenshoe. Wright Medical launched the deal early Wednesday for pricing after the market close.

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. There is contingent conversion at a price hurdle of 130% as well as takeover protection.

The deal will include one or more privately negotiated convertible note hedge and warrant transactions.

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.

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