CONMED Corporation Announces Pricing of Upsized $700 Million Offering of Convertible Senior Notes
The notes will be CONMED’s general senior unsecured obligations and will rank equally in right of payment with all of CONMED’s existing and future unsubordinated debt (including the Existing Notes (as defined below)) and senior in right of payment to all of CONMED’s future subordinated debt. The notes will be effectively subordinated to all of CONMED’s existing and future secured debt, including any borrowings outstanding under its credit facilities, to the extent of the value of the assets securing such indebtedness. The notes will be structurally subordinated to all of CONMED’s subsidiaries’ existing and future liabilities and obligations.
The notes will pay interest semi-annually on
CONMED intends to use approximately
If the option granted to the initial purchasers to purchase additional notes is exercised, CONMED may sell additional warrants and CONMED may use a portion of the proceeds from the sale of such additional notes, together with the proceeds from the sale of the additional warrants, to enter into additional convertible note hedge transactions.
In connection with the pricing of the notes, CONMED has entered into privately negotiated convertible note hedge transactions with one or more of the initial purchasers and/or their respective affiliates (the “option counterparties”). The convertible note hedge transactions will cover, subject to customary anti-dilution adjustments substantially similar to those applicable to the notes, the same number of shares of CONMED’s common stock that will initially underlie the notes, and are expected generally to reduce the potential dilution to CONMED’s common stock and/or offset any potential cash payments CONMED is required to make in excess of the principal amount upon conversion of the notes in the event that the market price of CONMED’s common stock is greater than the strike price of the convertible note hedge transactions. CONMED has also entered into warrant transactions with the option counterparties relating to the same number of shares of CONMED’s common stock, subject to customary anti-dilution adjustments. The warrant transactions could separately have a dilutive effect if the market price of CONMED’s common stock exceeds the strike price of the warrant transactions. The strike price of the warrant transactions will initially be approximately
CONMED has been advised by the option counterparties that, in connection with establishing their initial hedge position with respect to the convertible note hedge transactions and warrant transactions, the option counterparties and/or their respective affiliates expect to purchase shares of CONMED’s common stock in secondary market transactions and/or enter into various derivative transactions with respect to CONMED’s common stock concurrently with, or shortly after, the pricing of the notes, including with certain investors in the notes. This activity could increase (or reduce the size of any decrease in) the market price of CONMED’s common stock or the notes at that time.
CONMED has also been advised by the option counterparties that the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to CONMED’s common stock and/or purchasing or selling CONMED’s common stock or other of CONMED’s securities or instruments, including the notes, in secondary market transactions following the pricing of the notes and prior to the maturity of the notes.
The option counterparties may choose to engage in, or to discontinue engaging in, any of these transactions with or without notice at any time, and their decisions will be in their sole discretion. The effect, if any, of such activities of the option counterparties, including direction or magnitude, on the market price of CONMED’s common stock or the price of the notes will depend on a variety of factors, including market conditions, and cannot be ascertained at this time.
In addition, pursuant to separate and individually negotiated private transactions with certain holders of the Existing Notes, CONMED has agreed to repurchase or exchange approximately
The repurchase or exchange of the Existing Notes, and the potential related market activities by holders of the Existing Notes participating in the concurrent existing note transactions could increase (or reduce the size of any decrease in) the market price of the common stock and may have increased the initial conversion price of the Notes. In addition, the terminations of the Existing Note Hedges and related market activities could impact the market price of the common stock following the offering during the applicable unwind period. The Issuer cannot predict the magnitude of such market activity or the overall effect it will have on the price of the Notes or the common stock.
The notes were offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The offer and sale of the notes and the shares of common stock issuable upon conversion of the notes, if any, have not been registered under the Securities Act or the securities laws of any other jurisdiction, and the notes and any such shares may not be offered or sold absent registration or an applicable exemption from such registration requirements.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, including the notes or CONMED common stock, nor shall there be any sale of securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
CONMED is a medical technology company that provides surgical devices and equipment for minimally invasive procedures. The Company’s products are used by surgeons and physicians in a variety of specialties, including orthopedics, general surgery, gynecology, thoracic surgery, and gastroenterology.
This press release contains forward-looking statements based on certain assumptions and contingencies that involve risks and uncertainties, which could cause actual results, performance, or trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures. Forward-looking statements include, but are not limited to, statements regarding CONMED’s completion of the offering, the principal amount of securities sold, CONMED’s anticipated use of proceeds and the repurchase or exchange of the Existing Notes, CONMED’s intention to repurchase or exchange Existing Notes and CONMED’s intention to consummate certain convertible note hedge transactions related to the Existing Notes to terminate a corresponding portion of those hedges and to unwind certain warrant transactions sold at the time of issuance of the Existing Notes. In addition to general industry and economic conditions, factors that could cause actual results to differ materially from those in the forward-looking statements may include, but are not limited to, CONMED’s ability to meet the closing conditions required for the consummation of the offering, CONMED’s ability to reach agreements to repurchase or exchange Existing Notes and terminate such convertible note hedge transactions and unwind such warrant transactions and the risk factors discussed in CONMED's Annual Report on Form 10-K for the fiscal year ended
Chief Financial Officer