Boston, MA 09/05/2014 (wallstreetpr) – Depomed Inc (NASDAQ:DEPO) announced offering of Convertible Senior Notes, and it has moved to price the same. The Notes are due 2021 and may also convert into the company’s common stock shares. The funds raised from the Notes offering are intended for various uses in the company that include strategic deals and potential acquisitions. The company was quick to point out that there are currently no strategic or acquisition deals in the making.
Depomed, a specialty pharmaceutical company, is offering Notes worth $300 million. However, it initially announced an offering of $230 million but increased the offer. It said the Notes are subject to interest of 2.50% per share annually, but the same is payable semiannually in March and September and begins on March 1, 2015.
Room to purchase more Notes
Although Depomed is offering $300 million in Notes, it has allowed the underwriters to make additional purchases if need arises for such. The underwriters have a 30-day window of opportunity to obtain additional Notes worth $45 million. The company said the offering of the Notes is expected to close on September 9, but the closing date is subject to the usual closing conditions. The company has tapped Morgan Stanley (NYSE:MS) and RBC Capital Markets for the Notes offering exercise.
From the offering of $300 million Notes, Depomed Inc (NASDAQ:DEPO) expects about $290 million in net proceeds after the various deductions. However, if the underwriters fully take advantage of the opportunity to make additional Notes purchases, the company expects about $334 million in net proceeds. The funds raised are intended for such uses as working capital, general corporate purposes and acquisitions or strategic arrangements. However, Depomed doesn’t have any agreements related to acquisitions or strategic transactions at present.
Notes to shares conversion
The Notes on offer will convert to cash, common stock shares or a combination of cash and shares. Concerning the conversion of Notes to shares, the rate will be 51.9852 shares per $1,000 principal amount of the Notes. However, Depomed Inc (NASDAQ:DEPO) said the Notes will mature on September 1, 2021, if they are not converted, redeemed or purchased earlier.
