BOSTON – Haemonetics Corporation (NYSE: NYSE:HAE) has upsized its private offering to $600 million in convertible senior notes, an increase from the initially announced $525 million. The notes, due in 2029, are aimed at qualified institutional buyers and are expected to close on May 28, 2024, subject to standard closing conditions.
The convertible notes, which are senior and unsecured obligations of the company, will mature on June 1, 2029, unless repurchased, redeemed, or converted prior to that date. Holders of the notes will have the option to convert their notes at certain times before December 1, 2028, and at any time thereafter until the second scheduled trading day before the maturity date.
The initial conversion rate is set at 8.5385 shares of common stock per $1,000 principal amount of notes, which equates to an initial conversion price of approximately $117.12 per share, a 30% premium over Haemonetics' last reported sale price of its common stock.
Haemonetics has also granted the initial purchasers a 13-day option to buy up to an additional $100 million principal amount of notes, which could potentially bring the total offering to $700 million. The company has stated that the net proceeds, estimated at approximately $584.8 million or $682.3 million if the additional notes are purchased, will be used for various corporate purposes.
These include repurchasing $200 million of its 0.00% Convertible Senior Notes due 2026, paying off a $230 million balance on its revolving credit facility, and covering general corporate expenses such as working capital.
In conjunction with the offering, Haemonetics has entered into capped call transactions to potentially offset the dilution of its common stock upon conversion of the notes. The capped call transactions have an initial cap price of $180.18 per share, double the last reported sale price of the company's stock.
This financial move comes as part of Haemonetics' broader strategy to manage its capital structure and invest in its operations. The company, a global healthcare provider, focuses on products for blood and plasma collection, surgical suites, and hospital transfusion services.
This article is based on a press release statement and contains forward-looking statements regarding Haemonetics' financial strategies and potential outcomes. These statements are subject to market risks and uncertainties.
InvestingPro Insights
As Haemonetics Corporation (NYSE: HAE) announces its upsized private offering of convertible senior notes, several key metrics and expert insights can provide a deeper understanding of the company's financial health and future prospects.
According to InvestingPro, Haemonetics is trading at a high earnings multiple with a current P/E ratio of 41.6, suggesting that investors are expecting higher earnings in the future. Moreover, the company's stock has shown a strong return over the last three months, with a 22.55% increase, reflecting positive market sentiment.
InvestingPro Data reveals that Haemonetics has a market capitalization of $4.58 billion, underscoring its significant presence in the healthcare sector. The revenue growth for the last twelve months as of Q4 2024 stands at 12.01%, indicating a healthy increase in the company's sales. Moreover, the company's gross profit margin during the same period is notable at 54.13%, which demonstrates its ability to maintain profitability.
Here are a couple of InvestingPro Tips to consider:
- Analysts have revised their earnings downwards for the upcoming period, which could impact future stock performance.
- Despite trading at a high P/E ratio relative to near-term earnings growth, the company's cash flows can sufficiently cover interest payments, and its liquid assets exceed short-term obligations, pointing to financial stability.
For those interested in a deeper analysis, additional tips on Haemonetics are available on InvestingPro. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription. This offer is an excellent opportunity to access comprehensive financial data and expert insights that can inform investment decisions. There are 10 additional InvestingPro Tips listed for Haemonetics, which can be found at https://www.investing.com/pro/HAE.
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