Covidien plc (NYSE:COV) priced an offering of $1.5 billion worth of senior debt notes to finance its pending acquisition of ev3 Inc. (NSDQ:EVVV).
The Mansfield, Mass.-based medical products conglomerate said it plans to issue $500 million worth of 1.875 percent notes due in 2013; $400 million worth of 2.8 percent notes due in 2015; and $600 million worth of 4.2 percent notes due in 2020, all in a debt offering expected to close June 28.
If the ev3 deal fails to consummate by Dec. 31, or if the acquisition founders for other reasons, Covidien’s financing subsidiary will redeem the notes for 101 percent of their principal amount, plus accrued and unpaid interest.
Morgan Stanley & Co. Inc., Barclays Capital Inc. and Goldman, Sachs & Co. are acting as joint book-running managers for the offering, according to a press release.
Earlier this month, Covidien announced its $22.50-per-share bid for Plymouth, Minn.-based ev3, saying it planned to pay for the buyout with cash, debt and a bridge loan. The debt notes will be issued in a series of three offerings, according to a shelf registration. Covidien had about $1.72 billion in cash and equivalents as of March 26, according to the filing.