$200m (+15m) sen unsec cb coming tonight from JPM.
Term: 5.5y, 1.25-1.75% up 22.5-27.5%, full pctn. UOP hedge, $40m stk buyback, Mkt leader in surgical instruments, last in out mkt in ’07 (5 yr came 2.375% +25% with stk amazingly at this lvl). Co spent $89m cash but will double spinal mkt rev w/Seaspine acq. Liq good $660m ’16 revolver available. LTM FCF =62m, EBITDA = 137m, PF cash = 104m, debt = 506m. We’d assume L+400. ADV = low 150k, no leaps w/2yr 90d 10/50 ile = 20/23 vol
Not a lot of vol here, we’ll use 22% to give it benefit of doubt.. Theo= 99.2. We want to like it esp as we all want to see more paper but struggling here. AVOID
IART is a mkt leader in surgical instruments & neurosurgery. However, they compete against much larger companies incl J&J and Medtronic. Has historically been acquisitive. Taken a breather since 9/09 but now back w/seaspine acq last month. Spent $89m cash & will couble spinal mkt rev & distribution. More acq likely. Liquidity good w/new $600m sec revolver (due 6/16) all available and history of +ve FCF
Our assigned apread L+400