Nashville, Oct. 28 - Option Care Inc. sold $75 million of 20-year convertible notes at par to yield 2.25% with a 35% initial conversion premium, with proceeds earmarked in part to buy back up to 1.5 million shares of common stock from the company's chairman.
UBS Investment Bank was bookrunner of the Rule 144A deal, which priced at the cheap end of guidance for a 1.75% to 2.25% coupon and 35% to 40% initial conversion premium.
Buffalo Grove, Ill.-based Option Care said it intends to use proceeds for acquisitions, share repurchases, working capital and other general corporate purposes.
Option Care said it has reached an understanding with E.J. Financial/OCI Management LP pursuant to which E.J. Financial/OCI Management may sell back to Option Care up to 1.5 million shares of stock at a 25 cent discount to the closing price for the stock on the day of the convertible pricing.
E.J. Financial/OCI Management LP is the largest stockholder of Option Care and is controlled by John N. Kapoor, chairman of the company's board of directors. Assuming a sale of all 1.5 million shares, Kapoor will remain the largest stockholder.
Terms of the new deal are:
| Issuer: | Option Care Inc.
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| Issue: | Convertible senior notes
|
| Bookrunner: | UBS Investment Bank
|
| Co-managers: | Piper Jaffray & Co.
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| Amount: | $75 million
|
| Greenshoe: | $11.25 million
|
| Maturity: | Nov. 1, 2024
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| Coupon: | 2.25%
|
| Price: | Par
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| Yield: | 2.25%
|
| Conversion premium: | 35%
|
| Conversion price: | $18.01
|
| Conversion ratio: | 55.5278
|
| Contingent conversion: | No
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| Contingent payment: | No
|
| Call: | Non-callable for 5 years
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| Put: | In years 5, 10 and 15
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| Dividend protection: | Yes
|
| Takeover protection: | Yes
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| Price talk: | 1.75-2.25%, up 35-40%
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| Pricing date: | Oct. 27
|
| Settlement date: | Nov. 2
|
| Distribution: | Rule 144A
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