A Medical Device Daily
PolyMedica (Wakefield, Massachusetts) disclosed the pricing of $150 million principal amount of convertible subordinated notes, due 2011, through a private offering to qualified institutional buyers, first reported on Wednesday (Medical Device Daily, Sept. 14, 2006).
The notes will pay interest semiannually at a rate of 1% per annum. In certain circumstances, holders may elect to convert the notes into cash and, if applicable, shares of our common stock at an initial conversion price of $47.9028 (which represents a 14% premium to the closing price of $42.02 per share on Sept. 13.) resulting in an initial conversion rate of 20.8756 shares of common stock per $1,000 principal amount of the notes.
The notes will provide for “net share settlement” of any conversions, meaning that upon any conversion PolyMedica will pay the noteholder an amount in cash of up to the lesser of the conversion value or the par value of the notes and will settle any excess of the conversion value above the notes' par value in common stock.
In addition, the initial purchasers have exercised their option to purchase $30 million principal amount of additional notes to cover any overallotments.
PolyMedica estimated that the net proceeds from the offering will be about $174 million, after deducting discounts and expenses.
The company said it expects to use the net proceeds from this offering to repay about $118.6 million in outstanding bank debt and to repurchase roughly $29.6 million of its common stock in negotiated transactions from purchasers of the notes or their affiliates concurrently with the offering. These repurchase amounts represent the roughly 705,000 shares remaining in the company's existing stock repurchase program.
In addition, PolyMedica said it is using a portion of the proceeds to pay the cost of certain convertible note hedge and warrant transactions consisting of a call in favor of PolyMedica and a warrant issued to the initial purchasers or their affiliates. The convertible note call has an exercise price equal to the conversion price of the notes and the warrants have an exercise price that is 60% higher than the closing price of the company's common stock on Sept. 13, or $67.23 per share. The notes will be subordinated to existing and future senior indebtedness of PolyMedica. If the overallotment option is exercised, any remaining net proceeds will be used to further reduce bank debt outstanding under the company's existing facility.
PolyMedica is a U.S. provider of blood glucose testing supplies and related services, saying that it serves more than 888,000 patients.
Portico Systems (Conshohocken, Pennsylvania), a software solutions provider for health plans wanting to optimize provider network operations and streamline business processes, has received $6 million in capital from Safeguard Scientifics (Wayne, Pennsylvania).
Ned Moore, CEO of Portico said, “With Safeguard's support, we will be able to deepen our customer focus by building a world class service delivery team and investing in product development of our industry-leading platform.”
John Loftus and Kevin Kemmerer, senior vice president, information technology group at Safeguard, have joined Portico's board.
In other financing activities:
• Tibion (Moffett Field, California), a developer of orthotic devices based on bionic technologies, reported the initial closing of $3.5 million Series A financing.
Tibion said it plans to use the investment capital to accelerate development activities of its bionic devices, primarily the PowerKnee.
The round was led by Claremont Creek Ventures with participation from Saratoga Ventures.
• invivodata (Pittsburgh), a provider of electronic patient reported outcomes (ePRO) solutions for global clinical research, reported that it has secured access to almost $10 million in additional capital.
River Cities Capital Funds (Cincinnati) led a $6.6 million new round of investment.
• EastMed (Halifax, Nova Scotia) has secured $1.5 million in initial financing from InNOVAcorp and BDC Venture Capital's Technology Seed Investments fund, a division of the Business Development Bank of Canada.
The investment will fund clinical improvements and marketing to launch the company's new product to be marketed under the brand name Uresta, designed to help women control stress urinary incontinence (SUI).
The company estimated that SUI affects nearly 43 million women in North America and 157 million women in the developed world.
Uresta is a minimally invasive medical device that gives women the option to self-manage stress urinary incontinence. The company said it will be sold over the counter at pharmacies. The product will be available in Canada in the fall of 2007 and in the U.S. in 2008.
Nasdaq continues listing Merge Technologies
Merge Technologies (d.b.a. Merge Healthcare; Milwaukee) reported receiving notification from the staff of the Nasdaq Stock Market on Sept. 8 stating that the Qualifications Panel will continue listing the company's common stock on the Nasdaq Global Market. With the filing of its annual report on Form 10-K for the year ended Dec. 31, 2005, and quarterly reports on Form 10-Q for the quarters ended March 31, 2006, and June 30, 2006, the company has met the requirements for continued listing.