Wright Medical Group, Inc. : Prices $260 Million Cash Convertible Senior Notes Offering
08/22/2012| 09:35pm US/Eastern
Wright Medical Group, Inc. (NASDAQ: WMGI) (the "Company") today
announced the pricing of its offering (the "Offering") of $260 million
principal amount of cash convertible senior notes due 2017 (the
"Notes"). The Notes are being offered and sold to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of
1933, as amended. The Company also granted the initial purchasers of the
Notes an option to purchase up to an additional $40 million principal
amount of Notes to cover over-allotments. The Offering is expected to
close on August 31, 2012, subject to customary closing conditions.
Interest will be payable on the Notes semi-annually at a rate of 2.00
percent per annum on February 15 and August 15 of each year, beginning
February 15, 2013. Prior to February 15, 2017, the Notes will be
convertible into cash at the option of the holder under certain
conditions and, regardless of any conditions, thereafter until the
second scheduled trading day immediately preceding the maturity date .
The Notes will mature on August 15, 2017. The initial conversion rate
for the Notes is 39.3140 shares of the Company's common stock per $1,000
principal amount of the Notes, which is equivalent to a conversion price
of approximately $25.44 per share of the Company's common stock,
representing an approximately 27.50% conversion premium based on the
last reported sale price of the Company's common stock of $19.95 per
share on August 22, 2012.
In connection with the pricing of the Notes, the Company has entered
into privately negotiated convertible note hedge transactions with
certain financial institutions (the "Option Counterparties") to reduce
its exposure under the Notes to future increases in the price of the
Company's common stock. The Company has also entered into separate
privately negotiated warrant transactions with the Option
Counterparties, and the warrants have an exercise price that is 50.00%
higher than the last reported sale price per share of the Company's
common stock on August 22, 2012. The issuance of the warrants could have
a dilutive effect on the Company's common stock to the extent that the
market price of the Company's common stock exceeds the exercise price of
the warrants. If the initial purchasers exercise their over-allotment
option, the Company intends to enter into additional convertible note
hedge and warrant transactions.
The Company estimates that the net proceeds of the Offering will be
$251.2 million (or $289.3 million if the initial purchasers'
over-allotment option is exercised in full), after deducting the initial
purchasers' discounts and commissions and estimated offering expenses.
The Company is using approximately $130 million of the net proceeds of
the Offering to repay the outstanding term loan under its senior credit
facility, $18.7 million to fund the cost of the convertible note hedge
transactions described above (after such cost is partially offset by the
proceeds to the Company from the sale of the warrant transactions
described above), up to $29.1 million to fund any repurchases the
Company is able to make of its convertible senior notes due 2014 and the
remainder for general corporate purposes, including possible
In connection with the convertible note hedge transactions and the
separate warrant transactions, the Option Counterparties have advised
the Company that they and/or their affiliates expect to enter into
various derivative transactions in the Company's common stock, and may
purchase and sell the Company's common stock in secondary market
transactions, concurrently with or shortly after the pricing of the
Notes. These hedging activities could initially raise or maintain the
market price of the Company's common stock and could subsequently
otherwise affect the market price of the Company's common stock.
This announcement is neither an offer to sell nor a solicitation of an
offer to buy any of these securities and shall not constitute an offer,
solicitation or sale in any jurisdiction in which such offer,
solicitation or sale is unlawful.
The offer and sale of the Notes have not been registered under the
Securities Act of 1933, as amended, or any state securities laws and may
not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements. These statements
are based on current expectations or beliefs and are subject to factors
and uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. The Company is
providing this information as of the date of this news release and
assumes no obligation to update any forward-looking statement to reflect
events or circumstances occurring after the date of this press release.
Wright Medical Group, Inc.
Investors & Media:
Sr. Vice President, Chief Communications Officer
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