Analyst Summary
- Integer Holdings Corp priced an offering of $875.0 million aggregate principal amount of 1.875% convertible senior notes due 2030.
- The offering was upsized from the previously announced offering size of $750.0 million.
- The Company granted the initial purchasers an option to purchase up to an additional $125.0 million aggregate principal amount of the Convertible Notes.
- The Company anticipates net proceeds of approximately $853.9 million (or $976.1 million if the option is fully exercised).
- Approximately $62.1 million of the net proceeds will be used to pay for capped call transactions.
- Concurrently, the Company entered into note exchange transactions to exchange approximately $383.7 million of its existing 2.125% convertible senior notes due 2028.
- Consideration for the note exchange transactions includes approximately $384.4 million in cash and approximately 1.6 million shares of common stock.
- The Company intends to use the remaining net proceeds to repay borrowings under its credit agreement and for general corporate purposes.
- The initial conversion price of the Convertible Notes is approximately $150.96 per share, representing a 27.5% premium over the closing price on March 13, 2025.
- The Company entered into capped call transactions to reduce potential dilution upon conversion of the Convertible Notes.
- The Company expects option counterparties to purchase shares of the Company’s common stock and/or enter into derivative transactions, which could affect the market price of the Company’s common stock.
Potential Implications
Company Performance
- The offering provides Integer with additional capital to manage its debt and fund general corporate purposes.
- The capped call transactions are expected to reduce potential dilution to the Company’s common stock upon conversion of any Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Convertible Notes.
- The note exchange transactions allow the Company to manage its existing convertible debt.
- Repaying borrowings under the credit agreement could improve the Company’s financial flexibility.
Stock Price
- The capped call transactions and related hedging activities by option counterparties could increase or decrease the market price of the Company’s common stock.
- The note exchange transactions and related hedging activities by hedged holders could increase or decrease the market price of the Company’s common stock.
- The termination of existing option transactions could increase or decrease the market price of the Company’s common stock.