CONMED Corporation (NYSE: CNMD) today announced that it
intends to offer, subject to market conditions and other factors,
$600 million aggregate principal amount of its convertible senior
notes due 2027 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, for settlement within a 13-day period beginning on,
and including, the first day on which the notes are issued, up to
an additional $100 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 convertible note hedge
transactions entered into in connection with the offering (after
such cost is partially offset by the proceeds from concurrent
warrant transactions). CONMED intends to use a portion of the
remaining net proceeds from the offering to repurchase or exchange
a portion of its 2.625% convertible senior notes due 2024 (the
“Existing Notes”). CONMED intends to use the remaining net proceeds
to pay a portion of the cash consideration for its recently
announced acquisition of In2Bones Global, Inc. and to repay a
portion of indebtedness outstanding under its credit
facilities.
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) 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.
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.
The notes will mature on June 15, 2027, unless redeemed,
repurchased or converted earlier. 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 March 15, 2027, 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 pay cash up to the aggregate principal amount of the notes to
be converted and pay or deliver, as the case may be, cash, shares
of CONMED’s common stock or a combination of cash and shares of
common stock, at its election, in respect of the remainder, if any,
of its conversion obligation in excess of the aggregate principal
amount of the notes being converted.
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 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 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.
In addition, CONMED intends to enter into separate and
individually negotiated private transactions with certain holders
of the Existing Notes to repurchase or exchange Existing Notes for
cash, shares of CONMED’s common stock or a combination thereof.
CONMED expects that certain holders of Existing Notes that sell
their Existing Notes to CONMED, or exchange their Existing Notes
with CONMED, may have hedged their equity price risk with respect
to such notes and will, concurrently with or shortly after the
pricing of the notes, unwind all or a part of their hedge positions
by buying CONMED’s common stock and/or entering into or unwinding
various derivative transactions with respect to CONMED’s common
stock. The amount of CONMED’s common stock to be purchased by the
hedged holders may be substantial in relation to the historic
average daily trading volume. In addition, CONMED intends to enter
into agreements with the dealers party to certain convertible note
hedge transactions related to the Existing Notes to terminate a
corresponding portion of those hedges. CONMED also intends to enter
into agreements with those dealer counterparties to unwind certain
warrant transactions sold at the time of issuance of the Existing
Notes.
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,
thoracic surgery, and gastroenterology.
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 and CONMED’s anticipated use of proceeds, CONMED’s
intention to enter into negotiated private transactions with
certain holders of the Existing Notes to repurchase or exchange
Existing Notes and CONMED’s intention to enter into agreements with
the dealers party to 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 December 31, 2021 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/20220531005947/en/
CONMED Corporation Todd Garner Chief Financial
Officer 727-214-2975 ToddGarner@conmed.com
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