Zimmer Biomet offers to buy all 3.7% notes, starts capped offer for six series

Chicago, Nov. 15 – Zimmer Biomet Holdings, Inc. started cash tender offers for any and all of its 3.7% senior notes due 2023 and up to $1.5 billion aggregate purchase price for six series of notes, according to a press release.

The any and all offer for the $300 million outstanding 3.7% senior notes due 2023 (Cusip: 98956PAQ5) will be priced using the 1.375% U.S. Treasury due Feb. 15, 2023 plus a fixed spread of 20 basis points with a $30 early tender payment. Calculations will be made using the first par call date.

In the capped offer, the following $1,000-par notes are part of the offer, listed by acceptance priority level:

• $2 billion outstanding 3.55% senior notes due 2025 (Cusip: 98956PAF9) to be priced using the 1.125% U.S. Treasury due Oct. 31, 2026 with no additional spread;

• $900 million outstanding 3.55% senior notes due 2030 (Cusip: 98956PAT9) to be priced using the 1.375% U.S. Treasury due Nov. 15, 2031 plus a 65 bps spread;

• $395,424,000 outstanding 4.45% senior notes due 2045 (Cusip: 98956PAH5) with a $75 million subcap for tenders on the series and pricing to be based on the 2% U.S. Treasury due Aug. 15, 2051 plus a 105 bps spread;

• $600 million outstanding 3.05% senior notes due 2026 (Cusip: 98956PAS1) also with a $75 million subcap for tenders on the series to be priced using the 0.375% U.S. Treasury due Nov. 30, 2025 plus 40 bps;

• $253,417,000 outstanding 4.25% senior notes due 2035 (Cusip: 98956PAG7) to be priced using the 1.375% U.S. Treasury due Nov. 15, 2031 plus 135 bps; and

• $317,773,000 outstanding 5.75% senior notes due 2039 (Cusip: 98956PAB8) to be priced using the 1.75% U.S. Treasury due Aug. 15, 2041 plus 105 bps.

All of the total considerations will include a $30 early tender payment that will not be paid to noteholders who tender their notes after the early participation deadline.

Accrued interest will also be paid to the applicable settlement date.

The first five series will be priced using their par call dates with the sixth series to be priced using the maturity date.

Pricing will be determined at 10 a.m. ET on Nov. 30.

The tender offers are subject to a financing condition.

Tenders may be subject to proration in the capped tender offer.

The early participation deadline is 5 p.m. ET on Nov. 29, also the withdrawal deadline.

If the company opts for an early settlement date, it is expected to be on or after Dec. 1.

The tender offers will expire at 11:59 p.m. ET on Dec. 13.

Final settlement is planned for Dec. 15.

Barclays (800 438-3242, 212 528-7581, us.lm@barclays.com), Citigroup Global Markets Inc. (800 558-3745, 212 723-6106, ny.liabilitymanagement@citi.com) and Goldman Sachs & Co. LLC (800 828-3182, 212 902-5962) are the lead dealer managers.

Mizuho Securities USA LLC and Morgan Stanley & Co. LLC are the dealer managers.

BNP Paribas Securities Corp., BofA Securities, Inc., DNB Markets, Inc., HSBC Securities (USA) Inc., RBC Capital Markets, LLC and SMBC Nikko Securities America, Inc. are the co-dealer managers.

D.F. King & Co., Inc is the information and tender agent for the offer (800 859-8509, 212 269-5550, zbh@dfking.com).

Zimmer Biomet, based in Warsaw, Ind., designs, manufactures and markets orthopedic reconstructive and other products.

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