Enovis™ Corporation (NYSE: ENOV, “Enovis” or the “Company”) today
announced the pricing of $400 million aggregate principal amount of
3.875% Convertible Senior Notes due 2028 (the “Notes”) in a private
offering (the “Offering”). In connection with the Offering, Enovis
has granted the initial purchasers of the Notes an option to
purchase, within a 13-day period beginning on, and including, the
date on which the Notes are first issued, up to an additional $60
million aggregate principal amount of the Notes on the same terms
and conditions. The sale of the Notes to the initial purchasers is
expected to settle on October 24, 2023, subject to customary
closing conditions.
The Notes will bear interest at 3.875% per year.
Interest will accrue from October 24, 2023 and will be payable
semiannually in arrears on April 15 and October 15 of each year,
beginning on April 15, 2024. When issued, the Notes will be senior
unsecured obligations of Enovis and will rank equal in right of
payment to the Company’s unsecured and unsubordinated indebtedness.
The Notes will mature on October 15, 2028, unless earlier
repurchased, redeemed or converted in accordance with their terms
prior to such date. If the pending acquisition of LimaCorporate
S.p.A. (“Lima”) (the “Lima Acquisition”) is not consummated on or
prior to June 30, 2024 or if, before such time, the acquisition
agreement with respect to the Lima Acquisition is terminated or the
Company reasonably determines in good faith that the Lima
Acquisition will not be consummated, the Company may, at its
option, redeem all (but not less than all) of the Notes on a
redemption date on or prior to September 30, 2024, in cash at a
redemption price equal to 101% of the principal amount of the Notes
to be redeemed, plus accrued and unpaid interest to, but excluding,
the redemption date, plus a premium, if any.
Holders of the Notes will have the right to
require Enovis to repurchase all or a part of their Notes upon the
occurrence of a “fundamental change” in cash at a fundamental
change repurchase price of 100% of their principal amount plus any
accrued and unpaid interest to, but not including, the fundamental
change repurchase date. Following certain corporate events, Enovis
will, under certain circumstances, increase the conversion rate for
holders who elect to convert their Notes in connection with such
corporate event.
The initial conversion rate of the Notes will be
17.1474 shares of the Company’s common stock per $1,000 principal
amount of Notes (equivalent to an initial conversion price of
approximately $58.32 per share of the Company’s common stock, which
represents a conversion premium of approximately 30.0% to the last
reported sale price of the Company’s common stock on the New York
Stock Exchange on October 19, 2023). Prior to the close of business
on the business day immediately preceding April 15, 2028, the Notes
will be convertible at the option of the holders of the Notes only
upon the satisfaction of specified conditions and during certain
periods. On or after April 15, 2028 until the close of business on
the second scheduled trading day immediately preceding the maturity
date, the Notes will be convertible, at the option of the holders
of Notes, at any time regardless of such conditions. Upon
conversion, Enovis will pay cash up to the aggregate principal
amount of the Notes to be converted and pay or deliver, as the case
may be, cash, shares of the Company’s common stock or a combination
of cash and shares of the Company’s common stock, at the Company’s
election, in respect of the remainder, if any, of the Company’s
conversion obligation in excess of the principal amount of the
Notes being converted.
In connection with the pricing of the
Notes, the Company entered into privately negotiated capped call
transactions with certain of the initial purchasers or their
respective affiliates (the “option counterparties”). The capped
call transactions are expected generally to mitigate potential
dilution to the Company’s common stock upon conversion of any Notes
and/or offset any cash payments the Company is required to make in
excess of the principal amount of converted Notes, as the case may
be, with such reduction and/or offset subject to a cap. If the
initial purchasers exercise their option to purchase additional
Notes, the Company expects to enter into additional capped call
transactions with the option counterparties. The cap price of the
capped call transactions will initially be $89.72 per share of the
Company’s common stock, which represents a premium of 100% over the
last reported sale price of the Company’s common stock on the New
York Stock Exchange on October 19, 2023 and is subject to certain
adjustments under the terms of the capped call transactions.
In connection with the capped call transactions, concurrently
with or shortly after the pricing of the Offering, the Company
expects the option counterparties or their respective affiliates to
purchase shares of the Company’s common stock and/or enter into
various derivative transactions with respect to the Company’s
common stock. This activity could increase or reduce the size of
any decrease in the market price of the Company’s common stock
and/or the Notes. Further, while the Notes are outstanding,
these counterparties may modify any such hedge positions by
entering into or unwinding such positions, or by purchasing or
selling the Company’s common stock or other securities in secondary
market transactions. These counterparties are likely to
engage in such activities at any exercise date of or termination of
any portion of the capped call transactions. This activity could
cause or avoid an increase or decrease in the market price of the
Company’s common stock and/or the Notes.
Enovis estimates that the net proceeds from the
Offering will be approximately $386.9 million (or approximately
$445.1 million if the initial purchasers exercise their option to
purchase additional Notes in full), after deducting fees and
estimated expenses. Enovis intends to use approximately $53.9
million of the net proceeds from the Offering to pay the cost of
the capped call transactions. Enovis intends to use the remainder
of the net proceeds from the Offering, together with approximately
$400 million of borrowings under a new term loan facility, and cash
on hand to fund the cash purchase price of the pending acquisition
of Lima Acquisition, with any remaining proceeds being used for
general corporate purposes. Until the Lima Acquisition is
consummated, Enovis intends to hold the net proceeds from the
Offering in cash and cash equivalents or use the net proceeds from
the Offering to pay down borrowings under its existing credit
facility pending the closing of the transaction. If the initial
purchasers exercise their option to purchase additional Notes in
full, the Company expects to use approximately $8.1 million of the
net proceeds from the sale of the additional Notes to enter into
additional capped call transactions with the option counterparties
and the remainder to fund the purchase price of the Lima
Acquisition, with any remaining proceeds being used for general
corporate purposes. If the Lima Acquisition is not consummated, and
the Company does not elect to redeem the Notes in connection
therewith pursuant to the option described above, the Company
intends to use the proceeds the Company would have otherwise used
to finance in part the Lima Acquisition for general corporate
purposes.
The Notes were offered only to persons
reasonably believed to be qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”). The offer and sale of the Notes and any shares
of the Company’s common stock issuable upon conversion of the
Notes, if any, have not been, and will not be, registered under the
Securities Act or the securities laws of any other jurisdiction,
and unless so registered, the Notes and such shares, if any, may
not be offered or sold in the United States except pursuant to an
applicable exemption from such registration requirements.
This press release does not constitute an offer
to sell or a solicitation of an offer to buy, nor shall there be
any offer or sale of, the Notes (or any shares of the Company’s
common stock issuable upon conversion of the Notes) in any state or
jurisdiction in which the offer, solicitation, or sale would be
unlawful prior to the registration or qualification thereof under
the securities laws of any such state or
jurisdiction. About Enovis
Corporation
Enovis Corporation (NYSE: ENOV) is an
innovation-driven medical technology growth company dedicated to
developing clinically differentiated solutions that generate
measurably better patient outcomes and transform workflows. Powered
by a culture of continuous improvement, global talent and
innovation, the Company’s extensive range of products, services and
integrated technologies fuels active lifestyles in orthopedics and
beyond. The Company’s shares of common stock are listed in the
United States on the New York Stock Exchange under the symbol
ENOV.
Forward-Looking StatementsSome
of the statements contained in this press release that are not
historical facts are forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). The Company intends such forward-looking
statements to be covered by the safe harbor provisions for
forward-looking statements contained in Section 21E of the Exchange
Act. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Statements other than statements of historical fact
are statements that could be deemed forward-looking statements,
including statements regarding: the ability to consummate and
realize benefits from the Lima Acquisition; the impacts of the
completed spin-off of ESAB Corporation (“ESAB”) into an independent
publicly traded company (the “Separation”); the expected financial
and operating performance of, and future opportunities for, the
Company following the Separation; the impact of the COVID-19 global
pandemic; projections of revenue, profit margins, expenses, tax
provisions and tax rates, earnings or losses from operations,
impact of foreign exchange rates, cash flows, synergies or other
financial items; plans, strategies and objectives of management for
future operations including statements relating to potential
acquisitions, compensation plans or purchase commitments;
developments, performance, industry or market rankings relating to
products or services; future economic conditions or performance,
including the impact of increasing inflationary pressures; the
outcome of outstanding claims or legal proceedings; potential gains
and recoveries of costs; assumptions underlying any of the
foregoing; and any other statements that address activities, events
or developments that the Company intends, expects, projects,
believes or anticipates will or may occur in the future.
Forward-looking statements may be characterized by terminology such
as “believe,” “anticipate,” “should,” “would,” “could,” “may,”
“likely,” “intend,” “plan,” “will,” “expect,” “estimate,”
“project,” “positioned,” “strategy,” “targets,” “aims,” “seeks,”
“sees,” and similar expressions. These statements are based on
assumptions and assessments made by the Company’s management as of
the date of this press release in light of their experience and
perception of historical trends, current conditions, expected
future developments and are subject to risks, uncertainties and
other factors, including but not limited to: the risk that the
Company may not be able consummate the Lima Acquisition on the
anticipated terms or at all, the risk that the Company’s
assumptions with respect to the Offering and capped call
transactions may be incorrect, and other risks, uncertainties and
other factors set forth in the Company’s reports filed with the
U.S. Securities and Exchange Commission (the “SEC”), including its
most recent Annual Report on Form 10-K and subsequent Quarterly
Reports on Form 10-Q under the caption “Risk Factors,” as well as
the other risks and uncertainties set forth in the Company’s
other filings with the SEC. In addition, these statements are based
on assumptions that are subject to change. Any such forward-looking
statements are not guarantees of future performance and actual
results, developments and business decisions may differ materially
from those envisaged by such forward-looking statements. This press
release speaks only as of the date hereof. Enovis disclaims any
duty to update the information herein, except as required by
law.
Investor Relations ContactKyle RoseVice
President, Investor RelationsEnovis
Corporation+1-917-734-7450investorrelations@enovis.com
Media ContactKatie SweetVice President,
Corporate CommunicationsEnovis
CorporationKatie.sweet@enovis.com
Enovis (NYSE:ENOV)
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