Zimmer Biomet prices tender for five note series; offer oversubscribed

By Susanna Moon

Chicago, Dec. 6 – Zimmer Biomet Holdings, Inc. set pricing in the cash tender offers for five series of its notes at 11 a.m. ET on Dec. 6.

As announced Dec. 5, Zimmer increased its offer to buy back up to five note series to $1.25 billion from $1.1 billion.

Investors had tendered the following amount of notes as of 5 p.m. ET on Dec. 5, the early tender date, with a total purchase price for each $1,000 principal amount of notes, listed in order of priority acceptance level:

• $182,227,000 of the $500 million 5.75% senior notes due 2039 with a tender sub-cap of $250 million and pricing based on the 2.25% U.S. Treasury notes due Aug. 15, 2046 plus 170 basis points for a reference yield of 3.093% and total purchase price of $1,132.36;

• $854,576,000 of the $1.25 billion 4.45% senior notes due 2045 with pricing based on the 2.25% U.S. Treasury notes due Aug. 15, 2046 plus 170 bps for a reference yield of 3.093% and total purchase price of $946.78;

• $319,295,000 of the $500 million 4.25% senior notes due 2035 with pricing based on the 2.25% U.S. Treasury notes due Aug. 15, 2046 plus 155 bps for a reference yield of 3.093% and total purchase price of $951.23;

• $1,060,858,000 of the $2 billion 3.55% senior notes due 2025 with a tender sub-cap of $200 million and pricing based on the 2% U.S. Treasury notes due Nov. 15, 2026 plus 130 bps for a reference yield of 2.391% and total purchase price of $989.96; and

• $171,447,000 of the $500 million 4.625% senior notes due 2019 with a tender sub-cap of $200 million and pricing based on the 1% U.S. Treasury notes due Nov. 15, 2019 plus 65 bps for a reference yield of 1.397% and total purchase price of $1,073.76.

The total purchase price includes a $30.00 per $1,000 principal amount early premium for notes tendered by 5 p.m. ET on Dec. 5, the early tender date.

The tender offers were set to continue until 11:59 p.m. ET on Dec. 19. But because the offers were oversubscribed as of the early deadline, the company does not expect to accept for purchase any tenders after the early deadline.

Tendered notes may no longer be withdrawn, as of the early tender deadline.

The maximum tender price excludes accrued interest, which will be paid to but excluding the settlement date, which is expected to be Dec. 13 for early tendered notes.

Zimmer is making the offers to reduce the principal amount of its outstanding debt, according to a previous company announcement.

Notes purchased in the offers will be canceled.

The offers include a financing condition.

Zimmer priced €500 million of 1.414% notes due 2022 and €500 million of 2.425% notes due 2026 on Dec. 6. The notes were priced via joint bookrunners BNP Paribas, HSBC Bank plc, RBC Europe Ltd., MUFG Securities EMEA plc and Wells Fargo Securities International Ltd.

Proceeds from the euro notes will be used to help fund the tender offer.

J.P. Morgan Securities LLC (212 834-3424 or 866 834-4666) and Wells Fargo Securities, LLC (704 410-4760 or 866 309-6316) are the dealer managers. D.F. King & Co, Inc. (888 564-8149, 212 269-5550 or zbh@dfking.com).

Zimmer Biomet, based in Warsaw, Ind., designs, manufactures and markets orthopedic reconstructive and other products.

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