Envista Holdings Corporation has announced its plans to offer, contingent upon market and other conditions, a total combined principal value of $435,000,000 in Convertible Senior Notes due 2028 (referred to as the “notes”) in a private offering to qualified institutional buyers in accordance with Rule 144A under the amended Securities Act of 1933 (known as the “Securities Act”). Envista also anticipates granting the initial buyers of the notes the option to acquire an additional aggregate principal value of notes amounting to $65,250,000, which can be settled within a 13-day timeframe starting from the date the notes are initially released.
The notes, which will be unsecured senior obligations of Envista, will accrue interest paid semi-annually in arrears and will mature on August 15, 2028, unless they are converted, redeemed, or repurchased before that time. Noteholders will possess the right to convert their notes under specific circumstances and during designated periods. Envista will facilitate conversions by (i) providing cash payment for the principal amount of the converted notes and (ii) delivering the conversion value, which exceeds the principal amount of the notes, either in cash, shares of Envista’s common stock, or a combination of both, at the company’s discretion, based on applicable conversion rates.
The notes can be redeemed, either in full or in part (with certain limitations), at Envista’s discretion at any point starting from August 17, 2026, up to the 40th scheduled trading day preceding the maturity date, provided that the last reported sale price per share of Envista’s common stock surpasses 130% of the conversion price for a specified duration. The redemption price will encompass the principal amount of the redeemed notes and any accrued but unpaid interest, if applicable, up until but not including the redemption date.
In the event of specific corporate events that constitute a “fundamental change,” note holders can demand that Envista repurchase their notes in exchange for cash, with the repurchase price equivalent to the principal amount of the notes plus any accrued and unpaid interest, if any, up until but not including the repurchase date.
The particulars such as the interest rate and initial conversion rate for the notes will be determined during the pricing of the offering.
A portion of the net proceeds from the offering is expected to be utilized by Envista for the cash portion of the consideration in concurrent exchange transactions explained below. Envista intends to allocate the remaining net proceeds for general corporate purposes, which could encompass retiring the 2.375% Convertible Senior Notes due 2025 (known as the “2025 Notes”) via exchanges or redemptions. Concurrently with the offering, Envista plans to engage in separate privately negotiated transactions, entering into exchange agreements with a limited number of 2025 Notes holders to exchange or repurchase a portion of the outstanding 2025 Notes using a combination of cash and shares of Envista’s common stock. After the offering concludes, Envista might pursue additional exchanges, repurchases, or induced conversions involving the 2025 Notes. Holders of the 2025 Notes participating in these activities might buy or sell shares of Envista’s common stock in the open market to unwind any hedge positions related to the 2025 Notes or to hedge their exposure connected to these transactions. These actions could potentially impact the trading price of both Envista’s common stock and the offered notes. Additionally, market activities by holders of the 2025 Notes engaged in concurrent exchanges might influence the initial conversion price of the notes Envista is offering.
Upon issuing the 2025 Notes, Envista entered into capped call transactions (referred to as the “Existing Capped Call Transactions”) with certain financial institutions (the “Existing Option Counterparties”). In relation to the intended exchange of the 2025 Notes, Envista expects to enter into agreements with the Existing Option Counterparties to conclude a portion of the Existing Capped Call Transactions corresponding to the amount of 2025 Notes exchanged or repurchased. As part of the termination of the Existing Capped Call Transactions, Envista anticipates that the Existing Option Counterparties or their affiliated entities will unwind a part of their related hedge positions through derivatives transactions involving Envista’s common stock, effectively mimicking buying shares of Envista’s common stock and/or buying shares in the open market or secondary market transactions. This activity could potentially lead to an increase (or reduction in the size of any decrease) in the market price of Envista’s common stock, the 2025 Notes, or the offered notes. The magnitude of these market activities and their overall impact on the price of Envista’s common stock, the 2025 Notes, or the offered notes cannot be predicted by Envista.
It’s important to note that the offer and sale of the notes, along with any common stock shares that may be issued through note conversion or concurrent exchange transactions, have not been registered under the Securities Act or other securities laws. Therefore, these notes and shares cannot be offered or sold except through an exemption from, or in a transaction that is not subject to, the registration requirements of the Securities Act and other applicable securities laws. This press release does not constitute an offer to sell or a solicitation of an offer to buy the notes or any common stock shares that may arise from note conversion or concurrent exchange transactions. Additionally, there will be no sale of the notes or any such shares in any state or jurisdiction where such offer, sale, or solicitation would be considered unlawful
About Envista
Envista is a global family of more than 30 trusted dental brands, including Nobel Biocare, Ormco, DEXIS, and Kerr, united by a shared purpose: to partner with professionals to improve lives. Envista helps its customers deliver the best possible patient care through industry-leading dental consumables, solutions, technology, and services. Its comprehensive portfolio, including dental implants and treatment options, orthodontics, and digital imaging technologies, covers a wide range of dentists’ clinical needs for diagnosing, treating, and preventing dental conditions as well as improving the aesthetics of the human smile.
With a foundation comprised of the proven Envista Business System (EBS) methodology, an experienced leadership team, and a strong culture grounded in continuous improvement, commitment to innovation, and deep customer focus, Envista is well equipped to meet the end-to-end needs of dental professionals worldwide.
Envista is one of the largest global dental products companies, with significant market positions in some of the most attractive segments of the dental products industry.
For more information, please visit www.envistaco.com.
Forward-Looking Statements
Certain statements in this press release are “forward-looking” statements within the meaning of the federal securities laws. There are a number of important factors that could cause actual results, developments and business decisions to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements.
These factors include, among other things, the conditions in the U.S. and global economy, the impact of inflation and increasing interest rates, international economic, political, legal, compliance and business factors, the trading price and volatility of Envista’s common stock, the markets served by Envista and the financial markets, the impact of the COVID-19 pandemic, the impact of Envista’s debt obligations on its operations and liquidity, developments and uncertainties in trade policies and regulations, contractions or growth rates and cyclicality of markets Envista serves, risks relating to product manufacturing, commodity costs and surcharges, Envista’s ability to adjust purchases and manufacturing capacity to reflect market conditions, reliance on sole or limited sources of supply, disruptions relating to war, terrorism, climate change, widespread protests and civil unrest, man-made and natural disasters, public health issues and other events, security breaches or other disruptions of Envista’s information technology systems or violations of data privacy laws, fluctuations in inventory of Envista’s distributors and customers, loss of a key distributor, Envista’s relationships with and the performance of its channel partners, competition, Envista’s ability to develop and successfully market new products and services, Envista’s ability to attract, develop and retain its key personnel, the potential for improper conduct by Envista’s employees, agents or business partners, Envista’s compliance with applicable laws and regulations (including regulations relating to medical devices and the health care industry), the results of Envista’s clinical trials and perceptions thereof, penalties associated with any off-label marketing of Envista’s products, modifications to Envista’s products that require new marketing clearances or authorizations, Envista’s ability to effectively address cost reductions and other changes in the health care industry, Envista’s ability to successfully identify and consummate appropriate acquisitions and strategic investments, Envista’s ability to integrate the businesses it acquires and achieve the anticipated benefits of such acquisitions, contingent liabilities relating to acquisitions, investments and divestitures, Envista’s ability to adequately protect its intellectual property, the impact of Envista’s restructuring activities on its ability to grow, risks relating to currency exchange rates, changes in tax laws applicable to multinational companies, litigation and other contingent liabilities including intellectual property and environmental, health and safety matters, risks relating to product, service or software defects, the impact of regulation on demand for Envista’s products and services, and labor matters. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in Envista’s SEC filings, including Envista’s Annual Report on Form 10-K for fiscal year 2022 and Envista’s Quarterly reports on Form 10-Q. Envista may not consummate the proposed offering described in this press release and, if the proposed offering is consummated, cannot provide any assurances regarding the final terms of the offering or the notes or its ability to effectively apply the net proceeds as described above.
These forward-looking statements speak only as of the date of this press release and except to the extent required by applicable law, Envista does not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
