Wright Medical Group intends to commence an offering of $400 million aggregate principal amount of cash convertible senior notes due 2020.
Here are 10 things to know about the offering:
1. The notes are sold to initial purchasers who would resell the notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.
2. Wright medical intends to grant the initial purchasers a 30-day option to purchase up to an additional $60 million aggregate principal amount of notes solely to cover over-allotments.
3. The notes would be senior unsecured obligations and pay interest semiannually in arrears on Feb. 15 and Aug. 15 of each year, beginning in August 2015.
4. The notes are convertible into cash under the certain conditions and during certain periods based on the value of the company's common stock.
5. Interest rate, conversion rate, conversion price and other terms are determined by negotiations between Wright Medical and initial note purchasers.
6. The notes could be modified after the company's merger with Tornier is final. Wright Medical will fully and unconditionally guarantee the notes on a senior unsecured basis, and calculations and other determinations with respect to the notes relating to the company's common stock will instead be calculated or determined by reference to Wright N.V.'s ordinary shares.
7. Wright Medical intends to enter into one or more privately negotiated cash convertible note hedge transactions with certain financial institutions.
8. The company estimates net proceeds from the offering will be around $389 million. That amount will grow to $447 million if initial purchasers decide to purchase additional notes.
9. Wright Medical expects to use a portion of the proceeds from the offering to pay the cost of the cash convertible note hedge transactions.
10. The company may also enter into a transaction and repay up to around $250 million aggregate principal amount of the company's outstanding indebtedness in a privately negotiated transaction.