Emergent BioSolutions Inc. has announced the closing of its previously announced offering of 2.875 percent Convertible Senior Notes due 2021 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933. In a release, the Company said that it issued $250 million aggregate principal amount of its notes, which includes the additional $35 million principal amount of notes purchased by the initial purchasers under the exercise of the option granted to them by the company. Emergent said 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, which may include repaying outstanding indebtedness under its existing credit facility. 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 initial conversion rate for the notes is 30.8821 shares of common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $32.38 per share, and is subject to adjustment in certain circumstances. This initial conversion price represents a premium of approximately 37.5 percent relative to the last reported sale price of Emergent's common stock on January 23 , of $23.55 . 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 said that it 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. BofA Merrill Lynch and J.P. Morgan acted as joint book-running managers for this offering, and Cowen and Company and Janney Montgomery Scott acted as co-managers for this offering. ((Comments on this story may be sent to email@example.com ))
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