Danimer Scientific, Inc. (NYSE: DNMR) (“Danimer” or the
“Company”), a leading next generation bioplastics company focused
on the development and production of biodegradable materials,
announced today the pricing of its offering of $200,000,000
aggregate principal amount of 3.250% convertible senior notes due
2026 (the “notes”) in a private offering to persons reasonably
believed to be qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the “Securities
Act”). The offering size was increased from the previously
announced offering size of $175,000,000 aggregate principal amount
of notes. The issuance and sale of the notes are scheduled to
settle on December 21, 2021, subject to customary closing
conditions. Danimer also granted the initial purchasers of the
notes an option to purchase, for settlement within a period of 13
days from, and including, the date the notes are first issued, up
to an additional $40,000,000 aggregate principal amount of
notes.
The notes will be senior, unsecured obligations of Danimer and
will accrue interest at a rate of 3.250% per annum, payable
semi-annually in arrears on June 15 and December 15 of each year,
beginning on June 15, 2022. The notes will mature on December 15,
2026, unless earlier repurchased, redeemed or converted. Before
June 15, 2026, noteholders will have the right to convert their
notes only upon the occurrence of certain events. From and after
June 15, 2026, noteholders may convert their notes at any time at
their election until the close of business on the second scheduled
trading day immediately before the maturity date. Danimer will
settle conversions by paying or delivering, as applicable, cash,
shares of its Class A common stock, par value $0.0001 per share
(the “common stock”), or a combination of cash and shares of its
common stock, at Danimer’s election. The initial conversion rate is
92.7085 shares of common stock per $1,000 principal amount of
notes, which represents an initial conversion price of
approximately $10.79 per share of common stock. The initial
conversion price represents a premium of approximately 27.5% over
the last reported sale price of $8.46 per share of Danimer’s common
stock on December 16, 2021. The conversion rate and conversion
price will be subject to adjustment upon the occurrence of certain
events.
The notes will be redeemable, in whole or in part (subject to
certain limitations), for cash at Danimer’s option at any time, and
from time to time, on or after December 20, 2024 and on or before
the 40th scheduled trading day immediately before the maturity
date, but only if the last reported sale price per share of
Danimer’s common stock exceeds 130% of the conversion price for a
specified period of time and certain liquidity conditions have been
satisfied. The redemption price will be equal to the principal
amount of the notes to be redeemed, plus accrued and unpaid
interest, if any, to, but excluding, the redemption date.
If a “fundamental change” (as defined in the indenture for the
notes, but which would include, without limitation, certain change
of control transactions, such as certain mergers, sales of all or
substantially all of the assets of the Company and its
subsidiaries, taken as a whole, or a person or group of persons
acquiring beneficial ownership of a majority of the voting power of
the Company’s common stock, the Company’s stockholders approving
the liquidation or dissolution of the Company, or our common stock
ceasing to be listed on the NYSE, The NASDAQ Capital Market, The
NASDAQ Global Market or The NASDAQ Global Select Market) occurs,
then, except as described in the indenture, noteholders may require
Danimer to repurchase their notes for cash. The repurchase price
will be equal to the principal amount of the notes to be
repurchased, plus accrued and unpaid interest, if any, to, but
excluding, the applicable repurchase date.
Danimer estimates that the net proceeds from the offering will
be approximately $191.9 million (or approximately $230.7 million if
the initial purchasers fully exercise their option to purchase
additional notes), after deducting the initial purchasers’
discounts and commissions and estimated offering expenses. Danimer
intends to use $29.2 million of the net proceeds to fund the cost
of entering into the capped call transactions described below.
Danimer intends to use the remainder of the net proceeds from the
offering for general corporate purposes, including working capital
and capital expenditures. If the initial purchasers exercise their
option to purchase additional notes, then Danimer intends to use a
portion of the additional net proceeds to fund the cost of entering
into additional capped call transactions as described below.
In connection with the pricing of the notes, Danimer entered
into privately negotiated capped call transactions with one or more
of the initial purchasers or their affiliates and/or other
financial institutions (the “option counterparties”). The capped
call transactions will cover, subject to customary anti-dilution
adjustments, the number of shares of Danimer’s common stock
underlying the notes. If the initial purchasers exercise their
option to purchase additional notes, Danimer expects to enter into
additional capped call transactions with the option
counterparties.
The cap price of the capped call transactions will initially be
$16.92 per share, which represents a premium of 100% over the last
reported sale price of Danimer’s common stock of $8.46 per share on
December 16, 2021, and is subject to certain adjustments under the
terms of the capped call transactions upon the occurrence of
certain specified events, including without limitation certain
specified change of control transactions or any acquisition or
disposition by the Company for consideration in excess of 25% of
our market capitalization at such time.
The capped call transactions are expected generally to reduce
the potential dilution to Danimer’s common stock upon any
conversion of the notes and/or offset any potential cash payments
Danimer is required to make in excess of the principal amount of
converted notes, as the case may be, upon conversion of the notes.
If, however, the market price per share of Danimer’s common stock,
as measured under the terms of the capped call transactions,
exceeds the cap price of the capped call transactions, there would
nevertheless be dilution and/or there would not be an offset of
such potential cash payments, in each case, to the extent that such
market price exceeds the cap price of the capped call
transactions.
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties or their
respective affiliates expect to enter into various derivative
transactions with respect to Danimer’s common stock and/or purchase
shares of Danimer’s common stock concurrently with or shortly after
the pricing of the notes. This activity could increase (or reduce
the size of any decrease in) the market price of Danimer’s common
stock or the notes at that time.
Danimer has been advised that, in addition, the option
counterparties or their respective affiliates may modify their
hedge positions by entering into or unwinding various derivatives
with respect to Danimer’s common stock and/or purchasing or selling
Danimer’s common stock or other securities of Danimer in secondary
market transactions following the pricing of the notes and from
time to time prior to the maturity of the notes (and are likely to
do so following any conversion of the notes, any repurchase of the
notes by Danimer on any fundamental change repurchase date, any
redemption date or any other date on which the notes are retired by
Danimer, in each case if Danimer exercises the relevant election to
terminate the corresponding portion of the capped call
transactions). This activity could also cause or avoid an increase
or decrease in the market price of Danimer’s common stock or the
notes, which could affect the ability of noteholders to convert the
notes, and, to the extent the activity occurs during any
observation period related to a conversion of notes, it could
affect the number of shares, if any, and value of the consideration
that noteholders will receive upon conversion of the notes.
The notes will be offered only to persons reasonably believed to
be qualified institutional buyers pursuant to Rule 144A under the
Securities Act. The offer and sale of the notes and any shares of
common stock issuable upon conversion of the notes have not been,
and will not be, registered under the Securities Act or any other
securities laws, and the notes and any such shares cannot be
offered or sold except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and any other applicable securities laws. This press
release does not constitute an offer to sell, or the solicitation
of an offer to buy, the notes or any shares of common stock
issuable upon conversion of the notes, nor will there be any sale
of the notes or any such shares, in any state or other jurisdiction
in which such offer, sale or solicitation would be unlawful.
Forward-Looking Statements
Please note that in this press release we may use words such as
“appears,” “anticipates,” “believes,” “plans,” “expects,”
“intends,” “future,” and similar expressions which constitute
forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are made based on our expectations and
beliefs concerning future events impacting the Company and
therefore involve a number of risks and uncertainties.
Forward-looking statements within this press release include
statements regarding the completion of the offering and the
expected amount and intended use of the net proceeds and the
effects of entering into the capped call transactions described
above. We caution that forward-looking statements are not
guarantees and that actual results could differ materially from
those expressed or implied in the forward-looking statements.
Potential risks and uncertainties that could cause the actual
results of operations or financial condition of the Company to
differ materially from those expressed or implied by
forward-looking statements in this release include, but are not
limited to, the overall level of consumer demand on our products;
general economic conditions and other factors affecting consumer
confidence, preferences, and behavior; disruption and volatility in
the global currency, capital, and credit markets; the financial
strength of the Company's customers; the Company's ability to
implement its business strategy, including, but not limited to, its
ability to expand its production facilities and plants to meet
customer demand for its products and the timing thereof; risks
relating to the uncertainty of the projected financial information
with respect to the Company; the ability of the Company to execute
and integrate acquisitions; changes in governmental regulation,
legislation or public opinion relating to our products; the
Company’s exposure to product liability or product warranty claims
and other loss contingencies; disruptions and other impacts to the
Company’s business, as a result of the COVID-19 global pandemic and
government actions and restrictive measures implemented in
response; stability of the Company’s manufacturing facilities and
suppliers, as well as consumer demand for our products, in light of
disease epidemics and health-related concerns such as the COVID-19
global pandemic; the impact that global climate change trends may
have on the Company and its suppliers and customers; the Company's
ability to protect patents, trademarks and other intellectual
property rights; any breaches of, or interruptions in, our
information systems; the ability of our information technology
systems or information security systems to operate effectively,
including as a result of security breaches, viruses, hackers,
malware, natural disasters, vendor business interruptions or other
causes; our ability to properly maintain, protect, repair or
upgrade our information technology systems or information security
systems, or problems with our transitioning to upgraded or
replacement systems; the impact of adverse publicity about the
Company and/or its brands, including without limitation, through
social media or in connection with brand damaging events and/or
public perception; fluctuations in the price, availability and
quality of raw materials and contracted products as well as foreign
currency fluctuations; our ability to utilize potential net
operating loss carryforwards; and changes in tax laws and
liabilities, tariffs, legal, regulatory, political and economic
risks. More information on potential factors that could affect the
Company's financial results is included from time to time in the
Company's public reports filed with the Securities and Exchange
Commission, including the Company's Annual Report on Form 10-K/A,
Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.
All forward-looking statements included in this press release are
based upon information available to the Company as of the date of
this press release, and speak only as of the date hereof. We assume
no obligation to update any forward-looking statements to reflect
events or circumstances after the date of this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211216006241/en/
Investors ir@danimer.com Phone: 229-220-1103
Media Anthony Popiel apopiel@daltonagency.com Phone:
310-787-4807
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