A Medical Device Daily

NovaMed (Chicago) reported the pricing of its previously disclosed offering of 1% convertible senior subordinated notes, due 2012 (Medical Device Daily, June 22, 2007). The company also reported that the size of the offering had been increased to $75 million aggregate principal amount of notes (including notes to be issued under the underwriter’s overallotment option, which has been exercised in full).

The notes will be convertible at an initial conversion price of $6.371 a share, equal to an initial conversion rate of about 156.9612 shares per $1,000 amount of notes, under specified circumstances, on a “net share settled” basis. This means that rather than delivering shares of common stock when the notes are converted, NovaMed will settle any conversion in cash up to the notes’ principal amount and settle any excess of the notes’ conversion value above their principal amount by delivering shares of NovaMed stock, cash or a combination of cash and common stock at the company’s option.

The notes will be subordinate to NovaMed’s existing and future senior indebtedness and will be senior to any future subordinated indebtedness of the company.

In addition, NovaMed has sold warrants exercisable for its common stock at a price of $8.31 a share to the entity that acts as counterparty in the note hedge transaction.

The company said it intends to use $10 million of the proceeds from the offering to fund the cost of the convertible note hedge and warrant transactions. It plans to use the remaining proceeds from the note offering to repay a portion of the borrowings outstanding under its $125 million credit facility and may thereafter draw down those funds again to use for general corporate purposes.

NovaMed acquires ambulatory surgery centers in partnership with physicians and has ownership interests in 38 surgery centers in 18 states.

The notes sale is expected to close June 27.

Deutsche Bank Securities is acting as the underwriter of the note offering. The notes will accrue interest at an annual rate of 1%.

The board of directors of Medtronic (Minneapolis) increased its share repurchase plan, authorizing Medtronic to purchase an additional 50 million shares of its common stock, representing about 4.4 % of the company’s current total common shares of common stock outstanding.

This increases the total number of shares Medtronic is authorized to repurchase to about 60 million. During the past two fiscal years, Medtronic said it has repurchased 90.6 million shares of its common stock worth more than $4.6 billion.