Zimmer Biomet to spend $1.1 billion in tender for five series of notes

By Susanna Moon

Chicago, Nov. 21 – Zimmer Biomet Holdings, Inc. began cash tender offers for up to $1.1 billion purchase price of five series of its notes.

Pricing will be set at 11 a.m. ET on Dec. 6 for each $1,000 principal amount using a reference security plus a fixed spread as follows, with the notes listed in order of priority acceptance level:

• $500 million 5.75% senior notes due 2039 with a tender sub-cap of $250 million and pricing based on the 2.25% U.S. Treasury notes due Aug. 15, 2046 plus 170 basis points for a hypothetical total purchase price of $1,140.39;

• $1.25 billion 4.45% senior notes due 2045 with pricing based on the 2.25% U.S. Treasury notes due Aug. 15, 2046 plus 170 bps for a hypothetical total purchase price of $954.73;

• $500 million 4.25% senior notes due 2035 with pricing based on the 2.25% U.S. Treasury notes due Aug. 15, 2046 plus 155 bps for a hypothetical total purchase price of $957.62;

• $2 billion 3.55% senior notes due 2025 with a tender sub-cap of $200 million and pricing based on the 2% U.S. Treasury notes due Nov. 15, 2026 plus 130 bps for a hypothetical total purchase price of $994.70; and

• $500 million 4.625% senior notes due 2019 with a tender sub-cap of $200 million and pricing based on the 1% U.S. Treasury notes due Nov. 15, 2019 plus 65 bps for a hypothetical total purchase price of $1,075.53.

The total purchase price includes a $30.00 per $1000 principal amount early premium for notes tendered by 5 p.m. ET on Dec. 5, the early tender date.

The tender offers will end at 11:59 p.m. ET on Dec. 19. Tendered notes may be withdrawn by the early tender deadline.

The maximum tender price excludes accrued interest, which will be paid to but excluding the settlement date, which will be Dec. 13 for early tendered notes and Dec. 20 for remaining tenders.

Zimmer is making the offers to reduce the principal amount of its outstanding debt, according to a company announcement.

Notes purchased in the offers will be canceled.

The offers include a financing condition. Zimmer also announced on Monday that it has mandated BNP Paribas, HSBC, and RBC Capital Markets to arrange fixed-income investor meetings in Europe from Nov. 29 to Dec. 1.

A euro-denominated benchmark offering of notes in one or two tranches will follow. The maturity is expected to be in the seven to 12 year range.

Proceeds from the euro notes will be used to fund the tender offer.

J.P. Morgan Securities LLC (212 834-3424 or 866 834-4666) and Wells Fargo Securities, LLC (704 410-4760 or 866 309-6316) are the dealer managers. D.F. King & Co, Inc. (888 564-8149, 212 269-5550 or zbh@dfking.com).

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

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