Teladoc, Inc. (NYSE:TDOC) today announced the pricing of
its offering of $240 million aggregate principal amount of
Convertible Senior Notes due 2022 (the “Notes”) in a private
offering to qualified institutional buyers pursuant to an exemption
from the registration requirements of the Securities Act of 1933,
as amended (the “Securities Act”). The size of the offering was
increased by $40 million from the previously announced offering
size of $200 million. In connection with the offering of the
Notes, Teladoc granted the initial purchaser of the Notes an option
to purchase up to an additional $35 million aggregate principal
amount of Notes on the same terms and conditions solely to cover
over-allotments. The sale of the Notes is scheduled to close on
June 27, 2017, subject to satisfaction of customary closing
conditions.
Teladoc estimates that the net proceeds from this
offering will be approximately $229.4 million, after deducting the
initial purchaser’s discount and estimated offering expenses
payable by Teladoc, and assuming no exercise of the initial
purchaser’s option to purchase additional Notes solely to cover
over-allotments. Teladoc intends to use the proceeds from the
offering to finance a portion of the cash consideration payable in
connection with Teladoc’s previously announced acquisition
of Best Doctors Holdings, Inc. (the “Acquisition”), to
refinance existing indebtedness and to pay related fees and
expenses. Any remaining proceeds will be used for working capital
purposes or other general corporate purposes.
The Notes will mature on December 15, 2022, unless
earlier converted, redeemed or repurchased. The Notes will bear
interest at a rate of 3.00% per year, payable semi-annually in
arrears on June 15 and December 15 of each year, beginning December
15, 2017. The Notes will be unsecured, senior obligations of
Teladoc. Except as described in the immediately following sentence,
Teladoc may not redeem the Notes prior to December 22, 2020. If the
Acquisition is not consummated by August 12, 2017 (or Teladoc’s
board of directors reasonably determines in good faith that the
Acquisition will not be consummated by such date), or if the
agreement and plan of merger with respect to the Acquisition is
terminated, Teladoc may, at its option, redeem all (but not less
than all) of the Notes, in cash, on a redemption date occurring on
or prior to November 13, 2017 at a redemption price equal to 101%
of the principal amount of the Notes plus a premium determined
based on the price of Teladoc’s common stock prior to the
redemption date. On or after December 22, 2020, Teladoc may redeem
for cash all or part of the Notes if the last reported sale price
of its common stock equals or exceeds 130% of the conversion price
then in effect for at least 20 trading days (whether or not
consecutive) during any 30 consecutive trading days. The redemption
price will equal 100% of the principal amount of the Notes being
redeemed, plus accrued and unpaid interest, including additional
interest, if any, to, but excluding, the redemption date. In
addition, upon the occurrence of a fundamental change, holders of
the Notes will have the right, at their option, to require Teladoc
to repurchase their Notes in cash at a price equal to 100% of the
principal amount of the Notes to be repurchased, plus accrued and
unpaid interest to, but excluding, the fundamental change
repurchase date.
The Notes will be convertible, upon satisfaction of
certain conditions, at an initial conversion rate of 22.7247 shares
per $1,000 principal amount of Notes, which is equivalent to an
initial conversion price of approximately $44.00 per share, and
will be subject to adjustment upon the occurrence of certain
events. The initial conversion price represents a conversion
premium of approximately 30% over the last reported sale price of
$33.85 per share of Teladoc’s common stock on the New York Stock
Exchange on June 21, 2017. Teladoc will settle conversions of the
Notes by paying or delivering, as the case may be, cash, shares of
its common stock, or a combination of cash and shares of its common
stock, at its election.
The offering is being made to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act. Neither the Notes nor any shares of Teladoc’s common stock
issuable upon conversion of the Notes have been or will be
registered under the Securities Act or under any state securities
laws and, unless so registered, may not be offered or sold in the
United States or to U.S. persons except pursuant to an exemption
from, or in a transaction not subject to, the registration
requirements of the Securities Act and applicable state securities
laws.
This press release does not constitute an offer to
sell or the solicitation of an offer to buy any securities, nor
shall it constitute an offer, solicitation or sale in any
jurisdiction in which such offer, solicitation or sale is
unlawful.
About Teladoc, Inc.
Teladoc, Inc. (NYSE:TDOC) is the nation’s first and
largest telehealth platform. Recognized by MIT Technology
Review as one of the “50 Smartest Companies,” Teladoc is forging a
new healthcare experience with an innovative portfolio of virtual
care delivery solutions. Currently, Teladoc serves over 7,500
clients – from payers to providers to employers – and more than 20
million members who connect within minutes to Teladoc’s network of
more than 3,100 board-certified, state-licensed physicians and
therapists, 24/7. Teladoc’s services and solutions marry a highly
engaging consumer experience with the latest in data &
analytics, and a highly flexible technology platform. Teladoc has
delivered more than 2.5 million medical visits for general medical,
dermatology, counseling, psychiatry, sexual health, and tobacco
cessation.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains “forward-looking
statements” within the meaning of the safe harbor provisions of the
U.S. Private Securities Litigation Reform Act of 1995 concerning
Teladoc, Best Doctors Holdings, Inc., the Acquisition, the
financing for the Acquisition and other matters. Forward-looking
statements can be identified by words such as: “anticipate,”
“intend,” “plan,” “believe,” “project,” “estimate,” “expect,”
“may,” “should,” “will” and similar references to future periods.
Examples of forward-looking statements include, among others,
statements Teladoc makes regarding its financing plans (including
statements related to the offering of the Notes), the Acquisition,
future revenues, future earnings, future numbers of members or
clients, litigation outcomes, regulatory developments, market
developments, new products and growth strategies, and the effects
of any of the foregoing on Teladoc’s future results of operations
or financial conditions.
Forward-looking statements are neither historical
facts nor assurances of future performance. Instead, they are based
only on Teladoc’s current beliefs, expectations and assumptions
regarding the future of our business, future plans and strategies,
projections, anticipated events and trends, the economy and other
future conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of the control of Teladoc or Best Doctors
Holdings, Inc. Teladoc’s actual results and financial condition may
differ materially from those indicated in the forward-looking
statements. Important factors that could cause Teladoc’s actual
results and financial condition to differ materially from those
indicated in the forward-looking statements include, among others,
the following: (i) risks related to the Acquisition, including
failure to obtain applicable regulatory approvals in a timely
manner or at all, integration risks, exposure to international
operations, the financing thereof (including the offering of the
Notes) and failure to achieve the anticipated benefits of the
Acquisition; (ii) changes in laws and regulations applicable to
Teladoc’s business model; (iii) changes in market conditions and
receptivity to Teladoc’s services and offerings; (iv) results of
litigation; (iv) the loss of one or more key clients; and (v)
changes to Teladoc’s abilities to recruit and retain qualified
providers into Teladoc’s network. For a detailed discussion of the
risk factors that could affect Teladoc’s actual results, please
refer to the risk factors identified in Teladoc’s filings with the
Securities and Exchange Commission, including, but not limited to
Teladoc’s Annual Report on Form 10-K and Quarterly Reports on Form
10-Q.
Any forward-looking statement made by Teladoc in
this press release is based only on information currently available
to Teladoc and speaks only as of the date on which it is made.
Teladoc undertakes no obligation to publicly update any
forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information,
future developments or otherwise.
Contacts:
Investors:
Jisoo Suh
914-265-6706
jsuh@teladoc.com
Media:
Courtney McLeod
914-265-6789
cmcleod@teladoc.com
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