SAN DIEGO, Feb. 26, 2020 /PRNewswire/ -- NuVasive, Inc.
(NASDAQ: NUVA) announced today the pricing of its offering of
$450,000,000 aggregate principal
amount of 0.375% Convertible Senior Notes due 2025 (the
"Convertible Notes") in a private placement to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the "Securities Act"). NuVasive also
granted to the initial purchasers of the Convertible Notes a 13-day
option to purchase up to an additional $50,000,000 aggregate principal amount of the
Convertible Notes. The sale of the Convertible Notes to the initial
purchasers is expected to settle on March 2,
2020, subject to customary closing conditions, and is
expected to result in approximately $435.9
million in net proceeds to NuVasive after deducting fees and
estimated offering expenses payable by NuVasive (assuming no
exercise of the initial purchasers' option to purchase additional
Convertible Notes).
The Convertible Notes will be general unsecured obligations of
NuVasive and interest will be paid semiannually in arrears on
March 15 and September 15 of each year, beginning on
September 15, 2020. The Convertible Notes will mature on
March 15, 2025, unless earlier repurchased, redeemed or
converted. Prior to the close of business on the business day
immediately preceding September 15,
2024, the Convertible Notes will be convertible at the
option of holders only upon the satisfaction of certain conditions
and during certain periods. Thereafter until close of
business on the second scheduled trading day preceding maturity,
the Convertible Notes will be convertible at the option of the
holders at any time regardless of these conditions. Conversions of
Convertible Notes will be settled in cash, shares of NuVasive
common stock or a combination thereof, at NuVasive's
election. The Convertible Notes will not be redeemable at
NuVasive's option prior to March 20,
2023. On or after March 20,
2023 until the close of business on the business day
immediately preceding September 15,
2024, the Convertible Notes will be redeemable at NuVasive's
option if the last reported sale price of NuVasive's common stock
for at least 20 trading days in any 30 trading day period has been
at least 130% of the conversion price for the Convertible
Notes.
The initial conversion rate is 10.7198 shares of common stock
per $1,000 principal amount of
Convertible Notes (equivalent to an initial conversion price of
approximately $93.29 per share of
NuVasive common stock). The conversion rate and the
corresponding conversion price will be subject to adjustment upon
the occurrence of certain events, but will not be adjusted for any
accrued and unpaid interest. The initial conversion price of
the notes represents a premium of approximately 35% to the
$69.10 per share closing price of
NuVasive's common stock on February 26,
2020.
If NuVasive undergoes a fundamental change (as defined in the
indenture governing the Convertible Notes), holders may require
NuVasive to purchase for cash all or part of their Convertible
Notes at a purchase price equal to 100% of the principal amount of
the Convertible Notes to be purchased, plus accrued and unpaid
interest, if any, to, but excluding, the fundamental change
purchase date. In addition, if the Company calls any or all
of the Convertible Notes for redemption or certain make-whole
fundamental changes occur, NuVasive will, in certain circumstances,
increase the conversion rate for any Convertible Notes converted in
connection with such redemption or such make-whole fundamental
change.
In addition, in connection with the pricing of the Convertible
Notes, NuVasive entered into privately negotiated convertible note
hedge transactions and warrant transactions with certain dealers,
including affiliates of certain of the initial purchasers of the
Convertible Notes (the "Option Counterparties"). The
convertible note hedge transactions are expected generally to
reduce the potential dilution to NuVasive's common stock upon any
conversion of Convertible Notes and/or offset any cash payments
NuVasive is required to make in excess of the principal amount of
converted Convertible Notes, as the case may be, in each case upon
conversion of the Convertible Notes. The warrant transactions could
separately have a dilutive effect to the extent that the market
price per share of NuVasive's common stock exceeds the applicable
strike price of the warrants. However, subject to certain
conditions, NuVasive may elect to settle all or a portion of the
warrants in cash. The strike price of the warrant
transactions will initially be approximately $127.84 per share, which represents a premium of
approximately 85% over the last reported sale price of NuVasive's
common stock on February 26, 2020,
and is subject to certain adjustments under the terms of the
warrant transactions.
NuVasive expects that in connection with establishing their
initial hedges of these transactions, the Option Counterparties
and/or their respective affiliates will enter into various
derivative transactions with respect to NuVasive's common stock
and/or purchase NuVasive's common stock in secondary market
transactions concurrently with, or shortly after, the pricing of
the Convertible Notes. This activity could increase (or reduce the
size of any decrease in) the market price of NuVasive's common
stock or the Convertible Notes at that time. In addition, NuVasive
expects that the Option Counterparties and/or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to NuVasive's common
stock and/or purchasing or selling NuVasive's common stock or other
securities of NuVasive in secondary market transactions following
the pricing of the Convertible Notes and prior to the maturity of
the Convertible Notes (and are likely to do so during any
observation period related to a conversion of Convertible Notes).
This activity could also cause or avoid an increase or a decrease
in the market price of NuVasive's common stock or the Convertible
Notes, which could affect the ability of holders of Convertible
notes to convert the Convertible Notes and, to the extent the
activities occur during any observation period related to a
conversion of the Convertible Notes, could affect the amount of
cash and/or the number and value of shares of NuVasive common stock
that holders will receive upon conversion of the Convertible
Notes.
NuVasive intends to use approximately $31.2 million of the net proceeds from the
offering to pay the cost of the convertible note hedge transactions
(after such cost is partially offset by the proceeds to NuVasive
from the warrant transactions). Additionally, if the initial
purchasers exercise their option to purchase additional Convertible
Notes, NuVasive may sell additional warrants and use a portion of
the proceeds from the sale of the additional Convertible Notes to
enter into additional convertible note hedge transactions with the
Option Counterparties.
NuVasive also expects to use approximately $75,000,000 of the net proceeds from the offering
to repurchase shares of its common stock from purchasers of the
Convertible Notes in the offering in privately negotiated
transactions concurrently with the offering. NuVasive intends to
use the remaining net proceeds of the offering for working capital
and other general corporate purposes, which may include potential
mergers and acquisitions, to refinance indebtedness, and for
repurchases of outstanding Convertible Senior Notes due 2021 (the
"2021 Notes"). NuVasive may also use net proceeds from the
offering for additional repurchases of shares of common stock in
accordance with the Company's stock repurchase program, which
NuVasive's Board of Directors recently amended to allow for
repurchases of up to $150,000,000 of
the Company's common stock through December
31, 2021. The repurchase of shares of common stock and
any repurchase of the 2021 Notes could have the effect of raising
or maintaining the market price of NuVasive's common stock above
levels that would otherwise have prevailed, or preventing or
retarding a decline in the market price of NuVasive's common stock,
and thereby impacting the trading price of the Convertible Notes.
In the case of repurchases of common stock effected concurrently
with the offering, this activity could have affected the market
price of NuVasive's common stock and could have resulted in a
higher effective conversion price for the Convertible Notes.
The offering is only being made to qualified institutional
buyers pursuant to Rule 144A under the Securities Act.
Neither the Convertible Notes nor any shares of NuVasive's common
stock issuable upon conversion of the Convertible Notes have been
or are expected to 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 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 news 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.
NuVasive cautions you that statements included in this news
release that are not a description of historical facts are
forward-looking statements that involve risks, uncertainties,
assumptions and other factors which, if they do not materialize or
prove correct, could cause NuVasive's results to differ materially
from historical results or those expressed or implied by such
forward-looking statements. Forward-looking statements
include, but are not limited to, statements regarding the
actual terms of the Convertible Notes and the convertible
note hedge and warrant transactions, the completion, timing and
size of the proposed private offering of the Convertible Notes and
convertible note hedge and warrant transactions, and the
anticipated use of proceeds from the offering of the Convertible
Notes, and the other risks and uncertainties described in
NuVasive's news releases and periodic filings with the Securities
and Exchange Commission. NuVasive's public filings with the
Securities and Exchange Commission are available at www.sec.gov.
NuVasive assumes no obligation to update any forward-looking
statement to reflect events or circumstances arising after the date
on which it was made, except as required by law.
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SOURCE NuVasive, Inc.