By Angela McDaniels
Tacoma, Wash., June 26 – AmSurg Corp. priced $150 million of 5.25% mandatory convertible preferred stock, series A-1, at par of $100 with a 20.5% initial conversion premium after the close Thursday, according to a company news release.
There is a $22.5 million over-allotment option.
The issue was upsized from $125 million.
The convertibles were talked to yield 5.25% to 5.75% with an initial conversion premium of 17.5% to 22.5%, according to a syndicate source.
The conversion ratio is 1.8114 shares per $100 liquidation amount, or $55.21 per common share.
Unless converted earlier, each preferred will convert automatically on July 1, 2017 into between 1.8141 and 2.2222 shares, subject to customary anti-dilution adjustments. The conversion rate will be determined based on the average volume-weighted average price per share of AmSurg common stock over the 20 consecutive trading days beginning on the 22nd trading day immediately preceding July 1, 2017.
Dividends may be paid in cash, or subject to some limitations, in stock or a combination thereof.
Citigroup Global Markets Inc., SunTrust Robinson Humphrey Inc., Barclays, Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and Raymond James are the joint bookrunning managers.
The co-managers are BMO Capital Markets, Piper Jaffray & Co. and Cantor Fitzgerald & Co.
The registered mandatory deal priced concurrently with a public offering of $382.5 million of common stock. The offerings are not contingent on each other or on the consummation of AmSurg’s acquisition of Sheridan Healthcare Inc.
Together with common stock to be issued in the Sheridan transaction, additional debt financing and cash on hand, the proceeds from the stock and convertible offerings will be used to finance the Sheridan transaction, to repay borrowings under AmSurg’s existing credit facility and to repay the outstanding balance of its senior secured notes due 2020.
Nashville, Tenn.-based AmSurg acquires, develops and operates ambulatory surgery centers.
| Issuer: | AmSurg Corp.
|
| Issue: | Mandatory convertible preferred stock, series A-1
|
| Amount: | $150 million
|
| Greenshoe: | $22.5 million
|
| Mandatory conversion: | July 1, 2017
|
| Bookrunners: | Citigroup Global Markets Inc., SunTrust Robinson Humphrey Inc., Barclays, Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and Raymond James
|
| Co-managers: | BMO Capital Markets, Piper Jaffray & Co. and Cantor Fitzgerald & Co.
|
| Dividend: | 5.25%
|
| Price: | Par of $100
|
| Yield: | 5.25%
|
| Conversion premium: | 20.5%
|
| Conversion ratio: 1.8141
|
| Conversion price: | $55.21
|
| Price talk: | 5.25%-5.75%, up 17.5%-22.5%
|
| Pricing date: | June 26
|
| Stock symbol: | Nasdaq: AMSG
|
| Stock price: | $45.80 at close June 26
|
| Market capitalization: | $1.46 billion
|
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