Insulet closes $345 private placement

Insulet (NSDQ:PODD) said yesterday it closed a $345 million private placement, raking in $45 million more than it expected when it priced the round last week.

Billerica, Mass.-based Insulet, which makes the Omnipod insulin management system for treating diabetes, said it closed a private placement of $345 million principal amount in convertible senior notes, due 2021, with an annual interest rate of 1.25%.

The notes will bear a conversion rate of 17.1 shares of common stock per $1,000, approximately $58.37 per share of common stock, the company said. Net proceeds from the round were approximately $334 million, according to an SEC filing.

Approximately $154 million in proceeds from the sale will be used to repurchase $134 million in outstanding 2% convertible senior notes, due 2019, pursuant to individually negotiated transactions. Funds will also be used to support manufacturing and supply chain operations.

Insulet originally unveiled plans for the funding round last week, saying it plans to fund a new, automated U.S. plant in part with the proceeds from the expected $250 million debt offering.

A day earlier, the company revealed a 5-year deal with ATS Automation Tooling Systems to construct an automated manufacturing assembly line.

The $35 million contract calls for ATS to design, build and install manufacturing equipment developed according to technical specifications provided by Insulet. In addition to helping cover that tab, the debt offering is earmarked for “general corporate purposes,” including various refinancing moves and the settlement of its 2.0% convertible senior notes due in 2019. Investments in supply chain operations could also be in the offing, the company said.

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