JWCA advises CONMED ON ITS UPSIZED $800 MILLION CONVERTIBLE AND CALL SPREAD TRANSACTION

jUNE 2022 | read press release

Transaction Background

CONMED Corp (“CNMD”) successfully raised $800mm in the convertible market at attractive terms (2.25% coupon and 30.0% conversion premium)

CONMED’s objectives included:

  • Optimize the balance sheet by repurchasing the outstanding 2024 Notes and repay bank debt

  • Raise additional capital to help pay for the announced acquisition of In2Bones Global

CNMD engaged J. Wood Capital Advisors to assist in the structuring, negotiation, documentation and execution of the transaction

JWCA provided extensive analysis on deal structuring and related items, including:

  • Convertible and derivate overlay structuring

  • Repurchase analysis and execution strategy

  • Syndicate structure and precedent data

  • Convertible and call spread documentation to ensure maximum value and future efficiency/flexibility for the company

  • Shareholder messaging

JWCA designed and ran a call spread auction process to achieve competitive terms, and also ran a call spread unwind process to maximize the Company’s payout

JWCA provided advice, support and analysis throughout the execution process

Results

CONMED was well received by investors and was the first $500mm+ healthcare convertible in over 9 months:

  • The transaction was oversubscribed and upsized by $100 million

  • 2.25% coupon priced at the low end of the marketed range and 30% conversion premium priced at the mid point of the marketed range

  • CNMD’s stock price traded down only 3.9% on a day where peers traded down 2 – 3%. This compares to a typical stock price reaction of down 5 – 10%

Retired $275mm (~80%) of existing 2024 bonds with minimal friction cost

  • Effectively increased conversion price to $145.33 from $88.80 and lowered coupon to 2.25% from 2.625%

Call Spread documentation and auction process produced meaningful savings for CONMED, while maximizing flexibility