By Abigail W. Adams
Portland, Me., Jan. 23 – Elanco Animal Health Inc. priced $550 million, or 11 million units, of three-year par of $50 tangible equity units after the market close on Wednesday at par to yield 5% with a threshold appreciation premium of 20%, according to an FWP filing with the Securities and Exchange Commission.
Pricing came in line with talk for a fixed dividend of 5% and a fixed threshold appreciation premium of 20%, according to a market source.
Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and BofA Securities Inc. were joint bookrunners for the registered offering.
The equity units are composed of a prepaid stock purchase contract and a senior amortizing note with a principal amount of $7.2007 per note that bears interest at an annual rate of 2.75%.
The stock purchase contracts are callable on or after Nov. 1, 2020 at the maximum settlement rate. They are putable upon a fundamental change.
The equity units priced concurrently with an upsized common stock offering of 22,694,732 shares, which priced at $32.00 a share.
The common stock offering carries an upsized greenshoe of 2,269,473 shares. The initial size of the secondary offering was 19,159,866 shares with a greenshoe of 1,915,987.
Net proceeds from the common stock offering are expected to be $697.9 million, or $767.9 million if the greenshoe is exercised in full.
Net proceeds from the equity units are expected to be $528.1 million. Proceeds will be used to fund a portion of the previously announced acquisition of Bayer AG’s animal health business.
If the acquisition is not completed, proceeds will be used for general corporate purposes.
Elanco Animal Health is a Greenfield, Ind.-based global animal health company.
| Issuer: | Elanco Animal Health Inc.
|
| Securities: | Tangible equity units
|
| Amount: | $550 million, or 11 million units
|
| Maturity: | Feb. 1, 2023
|
| Bookrunners: | Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and BofA Securities Inc.
|
| Co-managers: | Barclays, BNP Paribas Securities Corp., Mizuho Securities USA Inc., MUFG and Stifel, Nicolaus & Co. Inc.
|
| Dividend: | 5%
|
| Price: | $50-par
|
| Yield: | 5%
|
| Premium: | 20%
|
| Conversion price: | $38.40
|
| Conversion rate: | Minimum 1.3021, maximum 1.5625
|
| Call options: | On or after Nov. 1, 2020 at the maximum settlement rate
|
| Put: | Upon a fundamental change
|
| Pricing date: | Jan. 22
|
| Settlement date: | Jan. 27
|
| Distribution: | Registered
|
| Talk: | Fixed dividend of 5% and a fixed threshold appreciation premium of 20%
|
| Stock symbol: | NYSE: ELAN
|
| Stock reference price: | $32.00 in concurrent offering
|
| Market capitalization: | $12.02 billion
|
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