LIMERICK, Pa., Aug 04, 2010 (BUSINESS WIRE) --
Teleflex Incorporated (NYSE: TFX) ("Teleflex") today announced that it
priced its previously announced public offering of $350 million in
aggregate principal amount of 3.875% convertible senior subordinated
notes due 2017 (the "convertible notes"). In addition, Teleflex granted
the underwriters an option to purchase up to an additional $50 million
in aggregate principal amount of convertible notes within 13 days from
the date of closing of the offering.
The offering of convertible notes is one of Teleflex's previously
announced refinancing transactions, which also include:
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the amendment of certain terms of Teleflex's senior secured credit
facilities, the extension of the maturity of a portion of Teleflex's
outstanding and available borrowings under the senior secured credit
facilities from 2012 to 2014, and the repayment of $200 million of
Teleflex's borrowings under the senior secured credit facilities; and
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the prepayment of all of Teleflex's outstanding senior notes issued in
2007, which have an outstanding aggregate principal amount of $196.6
million and mature in 2012 and 2014.
The convertible notes will be Teleflex's unsecured senior subordinated
obligations. The convertible notes will pay interest semi-annually on
February 1 and August 1 at a rate of 3.875% per year, and will mature on
August 1, 2017.
Prior to May 1, 2017, the convertible notes will be convertible only
upon specified events and during specified periods and, thereafter, at
any time. The convertible notes will initially be convertible at a
conversion rate of 16.3084 shares of Teleflex common stock per $1,000
principal amount of convertible notes, which is equivalent to an initial
conversion price of approximately $61.32, which isa 15%
conversion premium based on the last reported sale price of $53.32 per
share of Teleflex common stock on the New York Stock Exchange on August
3, 2010. Upon conversion, the convertible notes may be settled, at
Teleflex's option, in shares of Teleflex common stock, cash, or a
combination of cash and shares of Teleflex common stock.
In connection with the offering of the convertible notes, Teleflex has
entered into privately negotiated convertible note hedge transactions
with affiliates of certain of the underwriters in the offering (the
"hedge counterparties"). The convertible note hedge transactions will
cover, subject to customary anti-dilution adjustments, the number of
shares of Teleflex common stock that will initially underlie the
convertible notes, and are expected to reduce the potential dilution
with respect to Teleflex common stock and/or reduce Teleflex's exposure
to potential cash payments that may be required to be made by Teleflex
upon conversion of the convertible notes. Teleflex has also entered into
privately negotiated warrant transactions with the hedge counterparties
relating to the same number of shares of Teleflex common stock. However,
the warrant transactions could have a dilutive effect or, if Teleflex so
elects, obligate Teleflex to make cash payments to the extent that the
market price per share of Teleflex common stock exceeds the applicable
strike price of the warrants on any expiration date of the warrants. The
strike price of the warrant transactions will initially be $74.648 per
share, which is a 40% premium to the last reported sale price of
Teleflex common stock on August 3, 2010. In addition, if the
underwriters exercise their option to purchase additional convertible
notes, the number of shares of Teleflex common stock underlying the
convertible note hedge transactions and warrant transactions will be
automatically increased to correspond to the number of shares underlying
all convertible notes, including the additional convertible notes.
In connection with establishing their initial hedge of the convertible
note hedge transactions and warrant transactions, the hedge
counterparties or their affiliates expect to enter into various
cash-settled derivative transactions with respect to Teleflex common
stock concurrently with, orshortly following the pricing of the
convertible notes. In addition, the hedge counterparties or their
affiliates may modify their hedge positions by entering into or
unwinding derivatives with respect to Teleflex common stock and/or by
purchasing or selling Teleflex common stock in privately negotiated
transactions and/or open market transactions following the pricing of
the convertible notes (and are likely to do so during any conversion
period related to a conversion of convertible notes). Any of these
hedging activities could also increase, or prevent a decrease in, the
market price of Teleflex common stock.
Teleflex expects to use approximately $25.0 million of the net proceeds
from the offering of the convertible notes to pay the cost of the
convertible note hedge transactions (after such cost is partially offset
by the proceeds to Teleflex from the sale of the warrants). The
remaining net proceeds from the offering of the convertible notes,
together with available cash and borrowings under Teleflex's revolving
credit facility, will be used to repay $200 million of term loan
borrowings under Teleflex's senior secured credit facilities, prepay all
of Teleflex's outstanding senior notes issued in 2007, and pay related
transaction fees and expenses.
Goldman, Sachs & Co., Jefferies & Company, Inc., Morgan Stanley & Co.
Incorporated, BofA Merrill Lynch and J.P. Morgan Securities Inc. are
acting as joint book-running managers for the offering of the
convertible notes.
You may obtain a copy of the preliminary prospectus supplement, the
accompanying prospectus and the final prospectus supplement for the
offering of the convertible notes when available, from the SEC website
at www.sec.gov.
Alternatively, the underwriters will arrange to send you these documents
if you request them by contacting Goldman, Sachs & Co. at 200 West
Street, New York, NY 10282, (866) 471-2526 or emailing prospectus-ny@ny.email.gs.com,
Jefferies & Company, Inc. at 520 Madison Avenue, 12th Floor, New York,
NY 10022, Attention: Equity Syndicate Prospectus Department (877)
547-6340 or emailing Prospectus_Department@Jefferies.com,
Morgan Stanley & Co. Incorporated at 180 Varick Street, 2nd Floor, New
York, NY 10014, Attention: Prospectus Department, (866) 718-1649 or by
emailing prospectus@morganstanley.com,
BofA Merrill Lynch at 4 World Financial Center, New York, NY 10080,
Attention: Prospectus Department or emailing dg.prospectus_requests@baml.com
or J.P. Morgan Securities Inc. at 4 Chase Metrotech Center, CS Level,
Brooklyn, NY 11245, attention: Prospectus Library.
The offering of convertible notes will be made pursuant to Teleflex's
shelf registration statement filed with the Securities and Exchange
Commission (the "SEC"). This press release shall not constitute an offer
to sell or the solicitation of an offer to buy any securities nor shall
there be any sale of any securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
About Teleflex Incorporated
Teleflex is a global provider of medical technology products that enable
healthcare providers to improve patient outcomes, reduce infections and
support patient and provider safety. Teleflex, which employs
approximately 12,600 people worldwide, also has niche businesses that
serve segments of the aerospace and commercial markets with specialty
engineered products.
Caution Concerning Forward-Looking Information
This press release contains forward-looking statements. Actual results
could differ materially from those in the forward-looking statements due
to, among other things, conditions in the end markets Teleflex serves,
customer reaction to new products and programs, Teleflex's ability to
achieve sales growth, price increases or cost reductions; changes in the
coverage or reimbursement practices of third party payors; Teleflex's
ability to realize efficiencies and to execute on Teleflex's strategic
initiatives; changes in material costs and surcharges; market acceptance
and unanticipated difficulties in connection with the introduction of
new products and product line extensions; unanticipated difficulties in
connection with the consolidation of manufacturing and administrative
functions; unanticipated difficulties, expenditures and delays in
complying with government regulations applicable to Teleflex's
businesses, including unanticipated costs and difficulties in connection
with the resolution of issues related to the FDA corporate warning
letter issued to Arrow; the impact of government healthcare reform
legislation; Teleflex's ability to meet its debt obligations; changes in
general and international economic conditions; and other factors
described in Teleflex's filings with the SEC, including its Annual
Report on Form 10-K and the preliminary prospectus supplement relating
to the offering of the convertible notes.
SOURCE: Teleflex Incorporated
Teleflex Incorporated
Jake Elguicze
Vice President Investor Relations
610-948-2836