CONMED Corporation (NASDAQ: CNMD) today announced that it
intends to offer, subject to market conditions and other factors,
$275 million aggregate principal amount of its convertible senior
notes due 2024 in a private offering to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended (the “Securities Act”). In connection with the offering of
the notes, CONMED expects to grant the initial purchasers an option
to purchase, during a 13-day period beginning on, and including,
the first day on which the notes are issued, up to an additional
$41.25 million aggregate principal amount of the notes.
CONMED intends to use a portion of the net proceeds from the
offering of the notes to pay the cost of certain convertible note
hedge transactions, taking into account the proceeds to CONMED of
certain warrant transactions, each as described below. CONMED
intends to use the remaining net proceeds from the offering of the
notes, together with borrowings under its new credit facilities and
its cash on hand, to finance the acquisition (the “Buffalo Filter
Acquisition”) of Buffalo Filter LLC and Palmerton Holdings, Inc.
The offering of the notes is not conditioned on the consummation of
the Buffalo Filter Acquisition and there can be no assurance that
the Buffalo Filter Acquisition will be consummated. If the Buffalo
Filter Acquisition is not consummated, CONMED intends to use the
remaining net proceeds from the notes offering for general
corporate purposes.
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, 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 mature on February 1, 2024, unless earlier
repurchased or converted. The initial conversion rate, interest
rate and certain other terms of the notes will be determined by
negotiations between CONMED and the initial purchasers. Prior to
November 1, 2023, the notes will be convertible only upon
satisfaction of certain conditions and during certain periods, and
thereafter, the notes will be convertible at any time until the
close of business on the second scheduled trading day immediately
preceding the maturity date. Upon conversion, CONMED will satisfy
its conversion obligation by paying or delivering, as applicable,
shares of its common stock, cash or a combination of shares of its
common stock and cash, at CONMED’s election.
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 expects to
enter into privately negotiated convertible note hedge transactions
with one or more of the initial purchasers 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 also
expects to concurrently enter 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.
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.
The notes will be 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.
About CONMED Corporation
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,
neurosurgery, thoracic surgery and gastroenterology. CONMED has a
direct selling presence in 19 countries, and international sales
constitute approximately 50% of the Company’s total sales.
Headquartered in Utica, New York, the Company employs approximately
3,100 people.
Forward-Looking Statements
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
anticipated principal amount of securities sold, the final terms of
the offering, CONMED’s anticipated use of proceeds and the Buffalo
Filter Acquisition. 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
and the risk factors discussed in CONMED's Annual Report on Form
10-K for the fiscal year ended December 31, 2017 and listed under
the heading Forward-Looking Statements in CONMED’s most recently
filed Form 10-Q. Any and all forward-looking statements are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and relate to CONMED’s performance on
a going-forward basis. CONMED believes that all forward-looking
statements made by it have a reasonable basis, but there can be no
assurance that management’s expectations, beliefs or projections as
expressed in the forward-looking statements will actually occur or
prove to be correct.
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version on businesswire.com: https://www.businesswire.com/news/home/20190123005778/en/
CONMED CorporationTodd GarnerChief Financial
Officer315-624-3317ToddGarner@conmed.com
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