BREA,
Calif., Aug. 7, 2023 /PRNewswire/ -- Envista
Holdings Corporation (NYSE: NVST) ("Envista") today announced the
pricing of its offering of $435,000,000 in aggregate principal amount of its
1.75% Convertible Senior Notes due 2028 (the "notes") in a private
offering to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended (the "Securities
Act"). The issuance and sale of the notes are scheduled to settle
on August 10, 2023, subject to
customary closing conditions. Envista also granted the initial
purchasers of the notes an option to purchase, for settlement
within a period of 13 days from, and including, the date the notes
are first issued, up to an additional $65,250,000 aggregate principal amount of
notes.
The notes will be senior, unsecured obligations of Envista and
will accrue interest at a rate of 1.75% per annum, payable
semi-annually in arrears on February
15 and August 15 of each year,
beginning on February 15, 2024. The
notes will mature on August 15, 2028,
unless earlier converted, redeemed or repurchased. Before
February 15, 2028, noteholders will
have the right to convert their notes only upon the occurrence of
certain events. From and after February 15,
2028, noteholders may convert their notes at any time at
their election until the close of business on the second scheduled
trading day immediately before the maturity date. Envista will
settle conversions by (i) paying the principal amount of any such
converted notes in cash and (ii) paying or delivering, as
applicable, any conversion value in excess of the principal amount
of such notes in cash or a combination of cash and shares of
Envista's common stock, at its election, based on the applicable
conversion rate(s). However, upon conversion of any notes, the
conversion value, which will be determined over a period of
multiple trading days, will be paid in cash up to at least the
principal amount of the notes being converted. The initial
conversion rate is 21.5942 shares of common stock per $1,000 principal amount of notes, which
represents an initial conversion price of approximately
$46.31 per share of common stock. The
initial conversion price represents a premium of approximately
32.5% over the last reported sale price of $34.95 per share of Envista's common stock on
August 7, 2023. The conversion rate
and conversion price will be subject to adjustment upon the
occurrence of certain events.
The notes will be redeemable, in whole or in part, for cash at
Envista's option at any time, and from time to time, on or after
August 17, 2026 and on or before the
40th scheduled trading day immediately before the maturity date,
but only if the last reported sale price per share of Envista's
common stock exceeds 130% of the conversion price for a specified
period of time. The redemption price will be equal to the principal
amount of the notes to be redeemed, plus accrued and unpaid
interest, if any, to, but excluding, the redemption date.
If a "fundamental change" (as defined in the indenture for the
notes) occurs, then, subject to a limited exception, noteholders
may require Envista to repurchase their notes for cash. The
repurchase price will be equal to the principal amount of the notes
to be repurchased, plus accrued and unpaid interest, if any, to,
but excluding, the applicable repurchase date.
The notes have been rated Baa3 by Moody's. This rating is not a
recommendation to buy, sell or hold the notes. This rating may be
revised or withdrawn at any time and should be evaluated
independently of any other rating.
Envista estimates that the net proceeds from the offering will
be approximately $422.6 million (or
approximately $486.1 million if the
initial purchasers fully exercise their option to purchase
additional notes), after deducting the initial purchasers'
discounts and commissions and estimated offering expenses. Envista
expects to use approximately $403.0
million of the net proceeds from the offering to pay the
cash portion of the consideration in the concurrent exchange
transactions described below. Envista intends to use the remainder
of the net proceeds for general corporate purposes, which may
include subsequently retiring the 2.375% Convertible Senior Notes
due 2025 (the "2025 Notes") by exchanges or redemptions.
Concurrently with the offering, in separate, privately
negotiated transactions, Envista expects to enter into exchange
agreements with a limited number of holders of the 2025 Notes to
exchange or repurchase approximately $401.2
million principal amount of the 2025 Notes for aggregate
consideration consisting of approximately $403.0 in cash, which includes accrued interest
on the 2025 Notes, and approximately 8.4 million shares of
Envista's common stock. Following the completion of the offering,
Envista may engage in additional exchanges, or Envista may
repurchase or induce conversions, of the 2025 Notes. Holders of the
2025 Notes that participate in any of these exchanges, repurchases
or induced conversions may purchase or sell shares of Envista's
common stock in the open market to unwind any hedge positions they
may have with respect to the 2025 Notes or to hedge their exposure
in connection with these transactions. These activities may
adversely affect the trading price of Envista's common stock and
the notes. Moreover, market activities by holders of the 2025 Notes
that participate in the concurrent exchanges may have impacted the
initial conversion price of the notes.
In connection with issuing the 2025 Notes, Envista entered into
capped call transactions (the "Existing Capped Call Transactions")
with certain financial institutions (the "Existing Option
Counterparties"). In connection with the intended exchange of the
2025 Notes, Envista expects to enter into agreements with the
Existing Option Counterparties to terminate a portion of the
Existing Capped Call Transactions in a notional amount
corresponding to the amount of 2025 Notes exchanged or repurchased.
In connection with any termination of any of the Existing Capped
Call Transactions, Envista expects the Existing Option
Counterparties or their respective affiliates to unwind a portion
of their related hedge positions by entering into, or unwinding,
derivatives transactions with respect to Envista's common stock
economically equivalent to buying shares of Envista's common stock
and/or buying shares of Envista's common stock in the open market
or in secondary market transactions. This hedge unwind activity
could increase (or reduce the size of any decrease in) the market
price of Envista's common stock, the 2025 Notes or the notes.
Envista cannot predict the magnitude of the market activities
described above or the overall effect they will have on the price
of Envista's common stock, the 2025 Notes or the notes.
The offer and sale of the notes and any shares of common stock
issuable upon conversion of the notes or issuable pursuant to the
concurrent exchange transactions have not been, and will not be,
registered under the Securities Act or any other securities laws,
and the notes and any such shares cannot be offered or sold except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and any other
applicable securities laws. This press release does not constitute
an offer to sell, or the solicitation of an offer to buy, the notes
or any shares of common stock issuable upon conversion of the notes
or issuable pursuant to the concurrent exchange transactions, nor
will there be any sale of the notes or any such shares, in any
state or other jurisdiction in which such offer, sale or
solicitation would be unlawful.
About Envista
Envista is a global family of more than 30 trusted dental
brands, including Nobel Biocare, Ormco, DEXIS, and Kerr, united by
a shared purpose: to partner with professionals to improve lives.
Envista helps its customers deliver the best possible patient care
through industry-leading dental consumables, solutions, technology,
and services. Its comprehensive portfolio, including dental
implants and treatment options, orthodontics, and digital imaging
technologies, covers a wide range of dentists' clinical needs for
diagnosing, treating, and preventing dental conditions as well as
improving the aesthetics of the human smile. With a foundation
comprised of the proven Envista Business System (EBS) methodology,
an experienced leadership team, and a strong culture grounded in
continuous improvement, commitment to innovation, and deep customer
focus, Envista is well equipped to meet the end-to-end needs of
dental professionals worldwide. Envista is one of the largest
global dental products companies, with significant market positions
in some of the most attractive segments of the dental products
industry.
Forward-Looking Statements
Certain statements in this press release are "forward-looking"
statements within the meaning of the federal securities laws. There
are a number of important factors that could cause actual results,
developments and business decisions to differ materially from those
suggested or indicated by such forward-looking statements and you
should not place undue reliance on any such forward-looking
statements. These factors include, among other things, the
conditions in the U.S. and global economy, the impact of inflation
and increasing interest rates, international economic, political,
legal, compliance and business factors, the trading price and
volatility of Envista's common stock, the markets served by Envista
and the financial markets, the impact of the COVID-19 pandemic, the
impact of Envista's debt obligations on its operations and
liquidity, developments and uncertainties in trade policies and
regulations, contractions or growth rates and cyclicality of
markets Envista serves, risks relating to product manufacturing,
commodity costs and surcharges, Envista's ability to adjust
purchases and manufacturing capacity to reflect market conditions,
reliance on sole or limited sources of supply, disruptions relating
to war, terrorism, climate change, widespread protests and civil
unrest, man-made and natural disasters, public health issues and
other events, security breaches or other disruptions of Envista's
information technology systems or violations of data privacy laws,
fluctuations in inventory of Envista's distributors and customers,
loss of a key distributor, Envista's relationships with and the
performance of its channel partners, competition, Envista's ability
to develop and successfully market new products and services,
Envista's ability to attract, develop and retain its key personnel,
the potential for improper conduct by Envista's employees, agents
or business partners, Envista's compliance with applicable laws and
regulations (including regulations relating to medical devices and
the health care industry), the results of Envista's clinical trials
and perceptions thereof, penalties associated with any off-label
marketing of Envista's products, modifications to Envista's
products that require new marketing clearances or authorizations,
Envista's ability to effectively address cost reductions and other
changes in the health care industry, Envista's ability to
successfully identify and consummate appropriate acquisitions and
strategic investments, Envista's ability to integrate the
businesses it acquires and achieve the anticipated benefits of such
acquisitions, contingent liabilities relating to acquisitions,
investments and divestitures, Envista's ability to adequately
protect its intellectual property, the impact of Envista's
restructuring activities on its ability to grow, risks relating to
currency exchange rates, changes in tax laws applicable to
multinational companies, litigation and other contingent
liabilities including intellectual property and environmental,
health and safety matters, risks relating to product, service or
software defects, the impact of regulation on demand for Envista's
products and services, and labor matters. Additional information
regarding the factors that may cause actual results to differ
materially from these forward-looking statements is available in
Envista's SEC filings, including Envista's Annual Report on Form
10-K for fiscal year 2022 and Envista's Quarterly reports on Form
10-Q. Envista may not consummate the proposed offering described in
this press release and, if the proposed offering is consummated,
cannot provide any assurances regarding the final terms of the
offering or the notes or its ability to effectively apply the net
proceeds as described above. These forward-looking statements speak
only as of the date of this press release and except to the extent
required by applicable law, Envista does not assume any obligation
to update or revise any forward-looking statement, whether as a
result of new information, future events and developments or
otherwise.
Contact Information
Stephen Keller
Vice President Investor Relations
200 S. Kraemer Blvd., Building E
Brea, CA 92821
Telephone: (714) 817-7000
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SOURCE Envista Holdings Corporation