Omnicell talks $500 million five-year convertible notes to yield 0.25%-0.75%, up 30%-35%

By Abigail W. Adams

Portland, Me., Sept. 22 – Omnicell Inc. plans to price $500 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 30% to 35%, according to a market source.

J.P. Morgan Securities LLC and Wells Fargo Securities LLC are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

There is dividend and takeover protection.

The notes will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company will enter into convertible note hedge and warrant transactions.

Proceeds will be used to cover the cost of the hedge transactions, to pay down borrowings under its revolving credit facility and for general corporate purposes, which may include potential acquisitions and strategic transactions.

Approximately $75 million of net proceeds will be used to repurchase shares of common stock from the initial purchasers of the notes.

Omnicell is a Mountain View, Calif.-based medication management solutions company.

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