A Medical Device Daily
Aspect Medical Systems (Norwood, Massachusetts) said it has repurchased, in privately negotiated transactions, an aggregate of about $10 million face value of its 2.5% convertible senior notes due 2014, for aggregate consideration of roughly $6 million in cash, including accrued interest. In June 2007, Aspect issued $125 million of 2.5% notes. As a result of these repurchases, $115 million of the 2.5% notes remain outstanding.
As of March 29, Aspect had about $111 million in cash and marketable securities, without giving effect to the $6 million used by Aspect to repurchase a portion of the 2.5% notes.
Aspect's 2.5% notes are currently trading at discounts to their respective face amounts.
"This repurchase of our notes enables us to favorably restructure our balance sheet by reducing our debt position while maintaining an adequate level of cash," said Mike Falvey, CFO of Aspect. "Because this repurchase was done at a discount to face value, we will record a one-time gain of approximately $4 million on a pre-tax basis during our second quarter ending June 28, 2008. This gain was not reflected in our Q2 2008 guidance."
Aspect develops brain-monitoring technology. Its Bispectral Index technology has been used to assess nearly 26 million patients and has been the subject of more than 3,300 published articles and abstracts, the company said.
In other financing activity:
• Insulet (Bedford, Massachusetts) reported an offering of $65 million in aggregate principal amount of convertible senior notes due 2013 through an offering to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended. The company expects to grant the initial buyers an over-allotment option to purchase up to an additional $10 million in aggregate principal amount of notes.
The notes will be convertible under certain circumstances into cash up to their principal amount and shares of the company's common stock for the remainder, if any, of the conversion value in excess of such principal amount. The interest rate, conversion rate and other terms of the notes will be determined by negotiations between Insulet and the initial buyers.
Insulet said it would use the net proceeds from the offering to repay and terminate its outstanding term loan and for general corporate purposes.
• Healthnostics (New York), a medical and biotechnology information and technology company, reported that Global Medical Direct (GMD; Lenexa, Kansas) increased new patient customers by 30% in April over the previous month, which equated to the addition of nearly 1,500 new covered lives.
The increase in new customers will produce nearly $1.2 million in new annualized revenue that is on a recurring basis.
Last month Healthnostics reported acquiring a "significant interest" in GMD (Medical Device Daily, May 30, 2008).
GMD is a durable medical equipment provider specializing in direct to consumer diabetes supplies. The company's products include blood glucose meters, test trips and ancillary supplies, insulin pumps and supplies, diabetes maintenance medications, diabetic shoes and orthopedic inserts.