By Abigail W. Adams
Portland, Me., June 21 – Wright Medical Group NV priced $675 million of five-year cash convertible notes prior to the market open on Thursday with a coupon of 1.625% and an initial conversion premium of 22.5%, according to a company news release.
J. Wood Capital Advisors LLC was the placement agent for the private placement offering, according to an 8-K filing with the Securities and Exchange Commission.
The notes will be issued by subsidiary Wright Medical Group, Inc. and guaranteed by Wright Medical Group NV.
The notes are contingently convertible for cash until Dec. 15, 2023.
Holders of Wright Medical Group’s 2% cash convertible senior notes due 2020 entered into privately negotiated agreements to exchange $401 million of the 2% notes for $460 million of the 1.625% notes.
The company will deliver $1,146.10 for each $1,000 principal amount of the 2% notes in the exchange, according to the news release.
In connection with the pricing, the company entered into convertible note hedge and warrant transactions with Bank of America, N.A. and JPMorgan Chase Bank, according to the 8-K filing.
The warrants are exercisable for 20,228,333 shares and carry a strike price of $40.86, which represents a 50% premium from the last reported sale price of common stock.
In connection with the exchange, a portion of the company’s existing convertible note hedge and warrant transactions will be terminated.
Net proceeds are expected to be approximately $200 million with $39 million to be used to cover the cost of the call spread and the remaining $161 million to be used for general corporate purposes.
Wright Medical Group is an Amsterdam-based global medical device company.
| Issuer: | Wright Medical Group, Inc.
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| Securities: | Cash convertible senior notes
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| Amount: | $675 million
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| Maturity: | June 15, 2023
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| Placement agent: | J. Wood Capital Advisors LLC
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| Coupon: | 1.625%
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| Price: | Par
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| Conversion premium: | 22.5%
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| Conversion price: | $33.37
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| Conversion rate: | 29.9679
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| Pricing date: | June 21
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| Settlement date: | June 28
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| Stock symbol: | Nasdaq: WMGI
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| Stock price: | $27.24
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| Market capitalization: | $1.38 billion
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