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Emergent BioSolutions Reports Intent to Offer $200 Million Convertible Senior Notes

January 27, 2014

Emergent BioSolutions Inc. announced that it intends to offer, subject to market and other conditions, $200 million aggregate principal amount of Convertible Senior Notes due 2021 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. According to a release, Emergent also intends to grant the initial purchasers an option to purchase up to an additional $30 million aggregate principal amount of the Notes. Emergent reported that it intends to use a majority of the net proceeds from the offering to finance the acquisition of Cangene Corp. , announced in December 2013 . The company intends to use any remaining net proceeds from the offering for general corporate purposes. Additionally, the interest rate, conversion rate and other terms of the Notes will be determined at the time of pricing of the offering. The Notes will be senior unsecured obligations of Emergent and will accrue interest payable semiannually in arrears. Subject to Emergent's ability to terminate the conversion rights on or after January 20, 2017 as described below, the Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding the maturity date. Emergent will settle conversions of the Notes by delivering shares of its common stock. The conversion rate of the Notes, and the corresponding conversion price, will be subject to adjustment for certain events, but will not be adjusted for accrued interest. In addition, following certain corporate transactions that occur on or prior to the maturity date for the Notes, Emergent will increase the conversion rate for a holder that elects to convert its Notes in connection with such a corporate transaction. Emergent may terminate the conversion rights on or after January 20, 2017 if the last reported sale price of Emergent's common stock has been at least 130 percent of the conversion price for at least 20 trading days during the 30 consecutive trading day period prior to Emergent delivering notice of such termination (including the last trading day of such period). There is no "sinking fund" provided for the Notes, which means that Emergent will not be required to redeem or retire the Notes periodically. The Notes and the shares of common stock underlying the Notes have not been and will not be registered under the Securities Act, or any applicable state securities laws. Unless so registered, such Notes and such shares of common stock may not be offered or sold in the United States absent an exemption from the registration requirements of the Securities Act and applicable state securities laws. Emergent BioSolutions is a specialty pharmaceutical company seeking to protect and enhance life by offering specialized products to healthcare providers and governments to address medical needs and emerging health threats. ((Comments on this story may be sent to ))

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