By Toni Weeks and Rebecca Melvin
New York, Feb. 4 - Cepheid priced $300 million of 1.25% convertible senior notes after market close on Tuesday, according to a press release.
The deal was upsized from an initially talked $250 million, while the greenshoe for the Rule 144A offering was upsized to $45 million from $37.5 million.
Settlement is expected Feb. 10.
As previously reported, original price talk was for a coupon of 1.5% to 2% and an initial conversion premium of 27.5% to 32.5%, then, according to a syndicate source, tightened to a 1.25% to 1.5% yield with an initial conversion premium of 32.5%.
Morgan Stanley & Co. LLC and Jefferies LLC are the joint bookrunners.
The notes will be convertible under certain circumstances prior to Aug. 1, 2020 and thereafter at anytime. Upon conversion, the notes may be settled in common shares, cash or a combination of cash and shares, at Cepheid's election.
The notes will have an initial conversion rate of 15.3616 shares per $1,000 principal amount of notes, representing an initial effective conversion price of about $65.10 per share, a premium of about 32.5% to the $49.13 per share closing price on Feb. 4.
Cepheid has entered into capped call transactions with one or more of the initial purchasers of the notes or their respective affiliates. The capped call transactions are expected to reduce potential dilution and/or offset potential cash payments that could be required in excess of the principal amount upon conversion of the notes.
Proceeds of the seven-year non-call paper will be used for general corporate purposes, including potential acquisitions and strategic transactions, and to pay the cost of the capped call transactions.
Sunnyvale, Calif.-based Cepheid is a molecular diagnostics company.
| Issuer: | Cepheid
|
| Issue: | Convertible senior notes
|
| Amount: | $300 million, upsized from $250 million
|
| Greenshoe: | $45 million, increased from $37.5 million
|
| Maturity: | Feb. 1, 2021
|
| Bookrunners: | Morgan Stanley & Co. LLC and Jefferies LLC
|
| Coupon: | 1.25%, payable semiannually
|
| Price: | Par
|
| Yield: | 1.25%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $65.10
|
| Conversion rate: | 15.3616 shares per $1,000 of notes
|
| Call: | Prior to Aug. 1, 2020 under certain conditions; at any time thereafter
|
| Price talk: | 1.5% to 2%, up 27.5% to 32.5%, then 1.25% to 1.5%, up 32.5%
|
| Pricing date: | Feb. 4
|
| Settlement date: | Feb. 10
|
| Distribution: | Rule 144A
|
| Stock symbol: | Nasdaq: CPHD
|
| Stock price: | $49.13 at close Feb. 4
|
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