A Medical Device Daily

Zimmer (Warsaw, Indiana) said it has agreed to sell $1 billion of its senior unsecured notes in an underwritten public offering consisting of $500 million of 4.625% notes due 2019 and $500 million of 5.75% notes due 2039. The offering is expected to close Nov. 17.

The 10-year notes were priced to yield 118 basis points above their Treasury benchmark, and the 30-year notes were priced at 135 basis points above their Treasury benchmark.

Zimmer said last week that it intends to use the net proceeds of the offering to repay the outstanding U.S. dollar balance of its credit facility and for general corporate purposes, including the financing of its stock repurchase program (Medical Device Daily, Nov. 13, 2009).

Banc of America Securities, Citigroup Global Markets and J.P. Morgan Securities are serving as active joint book-running managers of the offering.

In other financing activity:

• Merge Healthcare (Milwaukee) said it is offering to sell up to 9,034,033 shares of common stock in a registered direct offering to select institutional investors at a purchase price of $3 a share.

Merge develops software solutions intended to automate healthcare data and diagnostic workflow to create a more comprehensive electronic record of the patient experience.

• ProUroCare Medical (Eden Prairie, Minnesota) reported the completion of its tender offer to holders of certain outstanding warrants, resulting in gross proceeds to the company of $1.6 million. Under the offer, the terms of the warrants were temporarily modified so that holders who exercised their warrants by Nov. 6 would receive, in addition to the shares of common stock purchased upon exercise, an equal number of three-year replacement warrants. The replacement warrants are exercisable at $1.30 a share and may be called at ProUroCare's discretion at any time after the last sales price of its common stock equals or exceeds $4 a share for ten consecutive trading days. Warrants to purchase more than 1.2 million shares were tendered pursuant to the offer.

The company said that proceeds from the offering would be used to accelerate certain technology enhancements and design improvements to the company's ProUroScan product and expand the number of ProUroScan system placements for clinical studies, as well as for working capital, operating expenses and other general corporate purposes.

• RehabCare Group (St. Louis) reported its underwritten public offering of 5.4 million shares of its common stock priced at $24 a share. In addition, the underwriters have been granted a 30-day option to purchase an additional 810,000 shares of common stock from the company at the public offering price, less underwriting discounts and commissions, solely to cover over-allotments, if any. The closing of the offering is expected to take place on Nov. 18, subject to customary closing conditions.

RehabCare said it intends to use the net proceeds from the offering, together with borrowings under its new senior credit facilities and cash on hand, to pay the consideration for its acquisition of Triumph HealthCare and related fees and expenses or for general corporate purposes.

BofA Merrill Lynch and J.P.Morgan are serving as joint book-running managers for the offering, and Deutsche Bank Securities, RBC Capital Markets and Morgan Keegan & Company are serving as co-managers.

RehabCare is a national provider of physical rehabilitation services in conjunction with over 1,250 hospitals and skilled nursing facilities in 41 states. The company also owns and/or operates freestanding rehabilitation and long-term acute care hospitals across the country.