OSI Systems Announces Pricing of Upsized $250 Million Convertible Senior Notes Due 2022
February 15 2017 - 7:16PM
Business Wire
OSI Systems, Inc. (NASDAQ: OSIS) (the “Company”) announced today
the pricing of an upsized private offering of $250
million aggregate principal amount of its 1.25% Convertible
Senior Notes due 2022 (the “Notes”) to be sold to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the “Securities Act”). The size of the
offering was increased by $25 million from the previously announced
offering size of $225 million. The Company has granted the initial
purchasers an option to purchase up to an additional $37.5
million principal amount of Notes solely to cover
over-allotments, if any. The sale of the Notes is expected to
close on February 22, 2017, subject to customary closing
conditions.
The Notes will be senior unsecured obligations of the Company.
The Notes will bear interest at a rate of 1.25% per year, payable
semiannually in arrears on March 1 and September 1 of each year,
beginning on September 1, 2017. The Notes will mature on September
1, 2022 unless earlier repurchased, redeemed or converted in
accordance with their terms. The Company will have the option to
redeem all or any portion of the Notes on or after March 6, 2020,
if certain conditions (including that the Company’s common stock is
at or above a specified level) are met, at a redemption price equal
to 100% of the principal amount plus accrued and unpaid interest
to, but excluding, the redemption date.
The Notes will be convertible at an initial conversion rate of
9.3056 shares of the Company’s common stock per $1,000 principal
amount of the Notes, which is equivalent to an initial conversion
price of approximately $107.46 per share, which represents a
conversion premium of approximately 38.5% to the last reported sale
price of $77.59 per share of the Company’s common stock on the
NASDAQ Global Select Market on February 15, 2017. In addition,
following certain corporate events that occur prior to the maturity
date for the Notes or if the Company calls the Notes for
redemption, the Company will, in certain circumstances, increase
the conversion rate for a holder that elects to convert its Notes
in connection with such corporate event or notice of redemption.
The Notes will be convertible into, subject to various conditions,
cash or shares of the Company’s common stock or a combination of
cash and shares of the Company’s common stock, in each case, at the
Company’s election.
The Company estimates that the net proceeds from the offering of
the Notes will be approximately $243.4 million (or approximately
$280.0 million if the initial purchasers exercise their option to
purchase additional Notes in full), after deducting fees and
estimated expenses. The Company expects to use the net proceeds to
repay borrowings under its credit facility, to repurchase shares of
the Company's common stock from purchasers of the Notes as
described below, and for general corporate purposes.
The Company expects to use approximately $35 million of the net
proceeds from the sale of the Notes to repurchase shares of the
Company’s common stock from purchasers of Notes in the offering in
privately negotiated transactions concurrently with the offering of
Notes effected through one of the initial purchasers (or an
affiliate thereof). The Company expects to repurchase such shares
at a purchase price per share equal to the closing price per share
of the Company's common stock on the date the offering of Notes was
priced, which was $77.59 per share. These repurchases of shares of
the Company's common stock may raise or maintain the market price
of the Company's common stock or the Notes above market levels that
otherwise would have prevailed or prevent or reduce a decline in
such market price. These transactions could also affect the market
price of the Company's common stock shortly after the pricing of
the Notes, and may have resulted in a higher effective conversion
price for the Notes.
Neither the Notes nor any shares of Company common stock
issuable upon conversion of the Notes have been or are expected to
be registered under the Securities Act or the securities laws of
any other jurisdiction and may not be offered or sold in the
United States absent registration or an applicable exemption
from such registration requirements.
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 OSI Systems, Inc.
OSI Systems, Inc. is a vertically integrated designer and
manufacturer of specialized electronic systems and components for
critical applications in the homeland security, healthcare,
defense, and aerospace industries. OSI combines more than 40 years
of electronics engineering and manufacturing experience with
offices and production facilities in more than a dozen countries to
implement a strategy of expansion into selective end-product
markets. For more information on OSI Systems, Inc. or any of its
subsidiary companies, visit OSI Systems. News Filter: OSIS-G
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements relate to OSI Systems' current
expectations, beliefs, projections and similar expressions
concerning matters that are not historical facts and are not
guarantees of future performance. Forward-looking statements
involve uncertainties, risks, assumptions and contingencies, many
of which are outside OSI Systems' control that may cause actual
results to differ materially from those described in or implied by
any forward-looking statements. All forward-looking statements
are based on currently available information and speak only as of
the date on which they are made. OSI Systems assumes no
obligation to update any forward-looking statement made in this
press release that becomes untrue because of subsequent events, new
information or otherwise, except to the extent it is required to do
so in connection with its ongoing requirements under Federal
securities laws. For a further discussion of factors that
could cause OSI Systems' future results to differ materially from
any forward-looking statements, see the section entitled "Risk
Factors" in OSI Systems' Annual Report on Form 10-K for the year
ended June 30, 2016 and other risks described in
documents filed by OSI Systems from time to time with
the Securities and Exchange Commission.
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version on businesswire.com: http://www.businesswire.com/news/home/20170215006412/en/
OSI Systems, Inc.Ajay Vashishat, 310-349-2237Vice
President, Business Developmentavashishat@osi-systems.com
OSI Systems (NASDAQ:OSIS)
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