Emergent BioSolutions Inc. (NYSE: EBS) announced today the closing of
its previously announced offering of 2.875% Convertible Senior Notes due
2021 in a private placement to qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933. Emergent 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 intends to use a majority of the net proceeds from the offering
to finance the acquisition of Cangene Corporation, 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% relative to the last
reported sale price of Emergent’s common stock on January 23, 2014 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 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% 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.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there be any
sale of these securities in any state in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under
the securities laws of any state.
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.
About Emergent BioSolutions Inc.
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.
Emergent BioSolutions Safe Harbor Statement
This press release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Any
statements, other than statements of historical fact, including
expectations regarding our use of net proceeds, and any other statements
containing the words “believes”, “expects”, “anticipates”, “intends”,
“plans”, “forecasts”, “estimates” and similar expressions, are
forward-looking statements. These forward-looking statements are based
on our current intentions, beliefs and expectations regarding future
events. We cannot guarantee that any forward-looking statement will be
accurate. Investors should realize that if underlying assumptions prove
inaccurate or unknown risks or uncertainties materialize, actual results
could differ materially from our expectations. Investors are, therefore,
cautioned not to place undue reliance on any forward-looking statement.
Any forward-looking statement speaks only as of the date of this press
release, and, except as required by law, we do not undertake to update
any forward-looking statement to reflect new information, events or
circumstances.
There are a number of important factors that could cause the company’s
actual results to differ materially from those indicated by such
forward-looking statements, including uncertainties with respect to our
pending acquisition of Cangene Corporation; our ability to successfully
integrate Cangene and realize the potential benefits of the transaction;
appropriations for BioThrax® procurement; our ability to
successfully integrate the recent acquisition of the HPPD business and
realize the benefits of the HPPD transaction; our ability to obtain new
BioThrax sales contracts or modifications to existing contracts; our
plans to pursue label expansions and improvements for BioThrax;
availability of funding for our U.S. government grants and contracts;
our ability to identify and acquire or in-license products or late-stage
product candidates that satisfy our selection criteria; whether
anticipated synergies and benefits from an acquisition or in-license are
realized within expected time periods or at all; our ability to enter
into selective collaboration arrangements; our ability to expand our
manufacturing facilities and capabilities; the rate and degree of market
acceptance and clinical utility of our products; the success of our
ongoing and planned development programs; the timing of and our ability
to obtain and maintain regulatory approvals for our product candidates;
and our commercialization, marketing and manufacturing capabilities and
strategy. The foregoing sets forth many, but not all, of the factors
that could cause actual results to differ from our expectations in any
forward-looking statement. Investors should consider this cautionary
statement, as well as the risk factors identified in our periodic
reports filed with the SEC, when evaluating our forward-looking
statements.
Copyright Business Wire 2014