Invacare (NYSE:IVC) today priced an upcoming offering of convertible notes, lifting it from a previously announced $100 million to $105 million aggregate principal amount.
In the round, Invacare will offer $105 million in convertible senior notes due 2022 in a private offering to institutional buyers. Final terms on the notes will be determined at pricing, Invacare said, offering that the notes will not bare interest and will mature on June 1, 2022.
Notes offered into the round will bear interest at 4.5% per year, payable semi-annually on June 1 and Dec. 1 each year, beginning this December. The conversion rate will initially be 61.61 common shares per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $16.23 per common share.
The initial conversion price of the notes represents a premium of approximately 32.5% to the $12.25 per share closing price of the company’s closing shares yesterday. Sale of the notes is expected to close June 14, according to a press release.
The Elyria, Ohio-based company said that in connection with the offering, it expects to grant the initial purchaser an option to purchase up to an additional $15 million aggregate principal amount of notes to be delivered within 13 days from issuance.
In connection with the offering, Invacare said it expects to enter a privately negotiated convertible note hedge transaction with Goldman Sachs & Co. covering the number of Invacare shares that will underly the notes to reduce potential equity dilution.
Proceeds from the round will help pay for the cost of the convertible note hedge transaction, with any remaining net proceeds going towards working capital and general corporate purposes, according to a press release.
The offering comes only days after ex-CEO Malachi Mixon III said he plans to trigger more than 700,000 convertible shares he controls. On June 1, the company said Mixon was pulling the trigger on the more than 700,000 convertible shares he controls. The 1-for-1 exchange will take Invacare’s voting power from 40,155,366 votes to 33,820,158 votes, the company said.
“The conversion will substantially diminish the significance of the company’s dual class voting structure, as after completion, the holders of the common shares will represent approximately 99.5% of the company’s total outstanding voting power,” Invacare said in a regulatory filing.
