UPDATED: Invacare offers $130M in senior notes

Wednesday, February 17, 2016

ELYRIA, Ohio – Invacare announced Feb. 17 that it’s offering $130 million aggregate principal amount of 5% convertible senior notes due 2021 in a private offering to qualified institutional buyers.

In connection with the offering, the company has granted the initial purchasers an option to purchase up to an additional $20 million aggregate principal amount of notes.

The conversion rate for the offering will be 60.0492 common shares per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $16.65 per common share. This represents a premium of about 30% to the $12.81 per share closing price on Feb. 17.

The sale of notes is expected to close Feb. 23.

Also in connection with the offering, Invacare entered into privately negotiated convertible note hedge transactions with JPMorgan Chase Bank, National Association, London Branch and one or more other financial institutions. These transactions will cover the number of the company’s common shares that will initially underlie the notes and are expected to reduce the potential equity dilution and/or offset any cash payments in excess of the principal amount due upon conversion of the notes.

Invacare estimates that the net proceeds from this offering will be about $124.8 million after deducting fees and estimated offering expenses.

Invacare expects to use $5 million of the net proceeds from this offering to repurchase the company’s common shares and $13.52 million to pay the cost of the convertible note hedge transactions. It intends to use the remaining net proceeds for working capital and general corporate purposes, which may include funding portions of the company’s ongoing turnaround.