Varex Imaging talks $150 million five-year convertibles to yield 3.5%-4%, up 25%-30%

By Abigail W. Adams

Portland, Me., June 4 – Varex Imaging Corp. plans to price $150 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 3.5% to 4% and an initial conversion premium of 25% to 30%, according to a market source.

Goldman Sachs & Co. LLC, BofA Securities Inc. and Wells Fargo Securities LLC are the bookrunners for the Rule 144A offering, which carries a greenshoe of $22.5 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 pricing of the notes, the company will enter into convertible note hedge and warrant transactions.

Proceeds will be used to cover the cost of the hedge transactions, to repay debt under its credit agreement and for general corporate purposes.

Varex Imaging is a Salt Lake City-based designer and manufacturer of X-ray imaging components.

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