Nashville, Aug. 6 - SFBC International Inc. sold am upsized $125 million of 20-year convertible senior notes at par to yield 2.25% with a 35% initial conversion premium via bookrunner UBS Investment Bank. It was sold on swap with up to $25 million of proceeds going to buy back stock from short sellers participating in the convertible offering.
The Rule 144A deal priced at the aggressive end of price talk for a 2.25% to 2.75% coupon and 30% to 35% initial conversion premium.
There is no contingent conversion trigger but a net share settlement provision that would diminish the impact of dilution. In net share settlement, the principal is paid back in cash and amounts attributed to appreciation in the stock price are paid in stock.
SFBC is a Miami-based biotech firm that provides specialized drug development services to branded pharmaceutical, biotech and generic drug companies as well as early clinical development services primarily for Phase I and Phase II clinical trials and bioanalytical lab services.
After the share repurchases, SFBC said it plans to use proceeds for general corporate purposes and acquisitions.
Terms of the deal are:
| Issuer: | SFBC International Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | UBS Investment Bank
|
| Amount: | $125 million, up from $100 million
|
| Greenshoe: | $18.75 million, up from $15 million
|
| Maturity: | Aug. 15, 2024
|
| Coupon: | 2.25%
|
| Price: | Par
|
| Yield: | 2.25%
|
| Conversion premium: | 35%
|
| Conversion price: | $41.08
|
| Conversion ratio: | 24.3424
|
| Dividend protection: | Yes
|
| Cash takeover protection: | Yes
|
| Call: | Non-callable for 5 years
|
| Put: | In years 5, 10 and 15
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| Price talk: | 2.25-2.75%, up 30-35%
|
| Pricing date: | Aug. 5, after the close
|
| Settlement date: | Aug. 11
|
| Distribution: | Rule 144A
|
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