OSI Systems, Inc. (NASDAQ: OSIS) has announced its intention to offer $275 million aggregate principal amount of convertible senior notes due 2029 in a private offering, with the option to purchase up to an additional $41.25 million principal amount of notes. The notes will be senior, unsecured obligations, accrue interest payable semi-annually in arrears, and mature on August 1, 2029, unless earlier repurchased, redeemed, or converted.
Noteholders will have the right to convert their notes in certain circumstances and during specified periods, with OSI settling conversions in cash and, if applicable, shares of its common stock. Additionally, the notes will be redeemable, in whole or in part, for cash at OSI's option on or after August 6, 2027, and before the 41st scheduled trading day immediately before the maturity date, subject to certain conditions.
If certain corporate events that constitute a "fundamental change" occur, noteholders may require OSI to repurchase their notes for cash. The interest rate, initial conversion rate, and other terms of the notes will be determined at the pricing of the offering.
Concurrently with the pricing of the offering, OSI expects to use up to approximately $100 million of the net proceeds from the offering to repurchase shares of its common stock in privately negotiated transactions, with the remainder of the net proceeds intended for purposes such as repaying a portion of the outstanding revolving credit facility and other general corporate uses.
The offer and sale of the notes and any shares of common stock issuable upon conversion of the notes have not been, and will not be, registered under the securities act or any other securities laws.
OSI Systems, Inc. is a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications in the homeland security, healthcare, defense, and aerospace industries, with over 40 years of electronics engineering and manufacturing experience and offices and production facilities in more than a dozen countries. As a result of these announcements, the company's shares have moved 1.8% on the market, and are now trading at a price of $145.95. For more information, read the company's full 8-K submission here.
