Integer Holdings Corporation (NYSE: ITGR) has recently closed a significant offering of $1.0 billion aggregate principal amount of 1.875% convertible senior notes due 2030. This offering was upsized from the initial $750 million to $875 million due to strong investor demand, with the initial purchasers fully exercising their option to purchase an additional $125 million aggregate principal amount of the notes.
The company expects this strategic transaction to have an immediate positive impact on its 2025 adjusted earnings, with a projected reduction in interest expense of approximately $12 million based on the current outstanding debt and interest rates.
Following the offering, the company estimates that the aggregate net proceeds will be approximately $976.1 million after deducting the initial purchasers' discounts and estimated offering expenses. These proceeds will be allocated towards various uses, including costs associated with capped call transactions related to the notes, exchange of a portion of the company's outstanding 2.125% convertible senior notes due 2028, and full repayment of outstanding borrowings and accrued interest under the company's revolving credit facility.
Furthermore, as a result of the related capped call transactions, dilution upon conversion of the notes will be mitigated by the increased effective conversion price of the notes to $189.44, representing a premium of 60% over the closing sale price of the company's common stock on March 13, 2025.
This move to enhance the company's capitalization structure and reduce interest costs is aligned with its strategic objectives, particularly in creating revolver capacity to continue its tuck-in acquisition strategy. Integer Holdings Corporation remains committed to its targeted leverage range of 2.5 to 3.5 times adjusted EBITDA.
As one of the largest medical device contract development and manufacturing organizations in the world, Integer Holdings Corporation is focused on serving the cardiac rhythm management, neuromodulation, and cardio and vascular markets. The company's brands include Greatbatch Medical® and Lake Region Medical®.
The successful closing of this offering, alongside its anticipated positive impact on the company's financials, reflects investor confidence in Integer's strategy and financial strength. Today the company's shares have moved 1.9% to a price of $121.29. If you want to know more, read the company's complete 8-K report here.
