Billerica, Mass.-based Insulet, which makes the Omnipod insulin management system for treating diabetes, said it priced a private placement of $300 million principal amount in convertible senior notes, due 2021, with an annual interest rate of 1.25%.
The offering also includes an option to purchase up to an additional $45 million principal amount of notes.
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..
Insulet said it expects to bring in approximately $290 million in net proceeds, or up to $334 million with the option to purchase additional notes, according to a press release.
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 yesterday, 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.
Last week, Insulet extended a materials and manufacturing deal with Flextronics (NSDQ:FLEX) for the Omnipod for another 5 years.
The post Insulet lifts debt offering to $300m appeared first on MassDevice.
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