LivaNova PLC (Nasdaq: LIVN), a prominent player in the medical technology sector, has announced the pricing of $300 million aggregate principal amount of 2.50% convertible senior notes due 2029 (referred to as the “notes”). These notes will be issued in a private offering, exclusively to individuals reasonably believed to be qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). Additionally, LivaNova has granted the initial purchasers of the notes an option to acquire up to an additional $45 million aggregate principal amount of the notes within a 13-day period starting from the date of issuance.
The sale of the notes to the initial purchasers is anticipated to settle on March 8, 2024, subject to customary closing conditions. It is expected to yield approximately $289.3 million in net proceeds to LivaNova after deducting the initial purchasers’ discount and estimated offering expenses payable by LivaNova. This figure could increase to $333.0 million if the initial purchasers’ option to purchase additional notes is exercised in full.
The notes will represent senior, unsecured obligations of LivaNova and will accrue interest at a rate of 2.50% per year, payable semiannually in arrears on March 15 and September 15 of each year, starting from September 15, 2024.
Until December 15, 2028, the notes will only be convertible under specific conditions. Subsequently, from December 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date, the notes may be converted at any time. LivaNova will fulfill any conversion of notes by paying cash up to the aggregate principal amount of such notes being converted. Additionally, LivaNova will pay or deliver cash, ordinary shares of LivaNova, or a combination of both, at its discretion, for any remaining conversion obligation exceeding the aggregate principal amount of such notes being converted. The initial conversion rate for the notes is 14.4085 ordinary shares per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $69.40 per share. This represents a conversion premium of about 32.5% to the last reported sale price of the ordinary shares on the Nasdaq Global Select Market on March 5, 2024.
The notes will mature on March 15, 2029, unless earlier converted, redeemed, or repurchased. LivaNova retains the option to redeem the notes, in whole or in part, on or after March 22, 2027, under certain conditions.
In connection with the pricing of the notes, LivaNova has entered into privately negotiated capped call transactions with certain initial purchasers in the notes offering or their respective affiliates and certain other financial institutions (referred to as the “option counterparties”). These transactions, having an expiration date matching the maturity date of the notes, aim to offset potential dilution to LivaNova’s ordinary shares upon conversion of the notes and to mitigate any excess cash payments required by LivaNova in the event of a market price per ordinary share exceeding the strike price of the capped call transactions.
Furthermore, LivaNova’s wholly-owned U.S. subsidiary, LivaNova USA, Inc., anticipates entering into separate transactions with certain holders of its 3.00% Cash Exchangeable Senior Notes due 2025 (the “cash exchangeable senior notes”) to repurchase $230.0 million aggregate principal amount of these notes for an aggregate cash amount of $270.5 million (including accrued and unpaid interest) (referred to as the “note repurchases”).
The net proceeds from the offering, after various deductions, will be utilized for general corporate purposes. It’s important to note that the notes were offered solely to individuals reasonably believed to be qualified institutional buyers under Rule 144A of the Securities Act and have not been registered under the Securities Act or the securities laws of any other jurisdiction. Additionally, LivaNova will seek listing of the notes on The International Stock Exchange in Guernsey.
This press release serves as a notification and does not constitute an offer to sell or a solicitation of an offer to buy the notes in any state or jurisdiction where such an offer, solicitation, or sale would be unlawful.
