A Medical Device Daily
Hologic (Bedford, Massachusetts), a company specializing in diagnostic, imaging products and interventional devices dedicated to serving the healthcare needs of women, reported the closing of its offering of $1.725 billion aggregate original principal amount of convertible senior notes due 2037, which included the exercise in full by the underwriters of the $225 million overallotment option granted to them by Hologic.
The net proceeds from the offering of about $1.69 billion, after deducting the underwriters’ discounts and estimated offering expenses payable by Hologic, were used to repay a portion of Hologic’s outstanding senior secured indebtedness.
The convertible senior notes mature in 2037 and will pay interest semiannually at a rate of 2% per annum until Dec. 15, 2013, after which their principal will accrete at a rate of 2% per annum. Commencing with the interest period beginning Dec. 15, 2013, the notes will also pay contingent interest under certain circumstances based on the trading price of the notes. The notes have an initial conversion rate of 12.9555 shares of common stock per $1,000 original principal amount of notes (equivalent to a conversion price of about $77.1875 per share). The initial conversion price represents a 25% premium over the closing sale price of Hologic’s common stock on Dec. 4.
Goldman, Sachs & Co. acted as the sole book-running manager of the offering.
Nanogen (San Diego), a developer of advanced diagnostic products, reported that it has filed with the Securities and Exchange Commission (SEC) a preliminary proxy statement for a special meeting of its stockholders.
At the special meeting, the stockholders will be asked to approve a series of measures that the company said it believes will increase the financing alternatives available to it, including approval of the company’s debt financing in August 2007 and approval of an increase in the number of its authorized shares of common stock.
Additionally, the company is seeking stockholder approval for the board at their discretion during the next year to affect a reverse split of its common stock in order to improve trading of its stock and to maintain its listing on the Nasdaq Global Market. Details of these proposals will be included in the definitive proxy statement that will be mailed to stockholders.
Approval of the proposals set forth in the proxy statement is an important and continuing component of the company’s restructuring activities reported in September that included the possible sale of the company’s microarray business (Medical Device Daily, Sept. 19, 2007). The company reported last month that it would close the operations of its array business and reduce staff by about 20% (MDD, Nov. 14, 2007)
Nanogen said the restructuring is expected to reduce expenses by more than $20 million per year and to significantly reduce the cash required to fund the business until positive cash flow is achieved. The company expects to achieve cash flow breakeven in late 2008 and will seek stockholder approval of measures that it believes will enable the company to finance itself as a component of future success.
In other financing news:
• Orthopedics company Wright Medical Group (Arlington, Tennessee) reported that the underwriters of its public offering of convertible senior notes due 2014 have exercised in full their over-allotment option to purchase an additional $25 million aggregate principal amount of the notes. This will bring the total amount of the notes issued to $200 million.
The notes pay interest semiannually at a rate of 2.625% per annum. The notes are convertible into shares of Wright's common stock at an initial conversion rate of 30.6279 shares per $1,000 principal amount of the notes, which represents an initial conversion price of about $32.65 per share.
Wright said it intends to use the net proceeds from the offering for general corporate purposes, including for acquisitions from time to time.
The closing of the sale of the over-allotment of the notes is expected to occur on Thursday, and is subject to the satisfaction of customary closing conditions.
J.P. Morgan Securities is acting as sole book-running manager of the offering. Piper Jaffray & Co. and Wachovia Capital Markets are acting as co-managers of the offering.