Integer Holdings Corporation Announces Conversion Period for 2.125% Convertible Senior Notes due 2028 and Upsize of Revolving Credit Facility

Rhea-AI Summary

Integer Holdings (NYSE: ITGR) has announced that its 2.125% Convertible Senior Notes due 2028 are now convertible from July 1, 2024, to September 30, 2024. The notes can be converted into cash, shares of Integer's common stock, or a combination of both, at a conversion rate of 11.4681 shares per $1,000 principal amount, equivalent to $87.20 per share.

Additionally, Integer has amended its credit agreement, increasing its revolving credit facility by $300 million, bringing the total to $800 million. This move aims to enhance the company's liquidity, supporting its long-term strategic objectives while maintaining a debt leverage target of 2.5 to 3.5.

Positive

• Integer Holdings has increased its revolving credit facility by $300 million, enhancing liquidity.
• Convertible notes are now an option for investors, potentially increasing stock value.

Negative

• The conversion of notes may lead to shareholder dilution if converted into stock.

Insights

Financial Analyst

The news of Integer Holdings Corporation announcing the conversion period for its 2.125% Convertible Senior Notes due 2028 and the upsizing of its revolving credit facility is quite significant for investors.

Convertible Senior Notes: The opportunity for noteholders to convert these notes into cash or stock could lead to increased liquidity for the company but may also lead to equity dilution if many choose to convert into shares. The conversion rate of 11.4681 shares per $1,000 principal amount of Notes equates to a conversion price of approximately $87.20 per share. This is relevant because it shows that the company's stock has appreciated sufficiently to trigger the conversion option. Retail investors should watch for any significant conversion activity which might impact share price due to increased equity supply.

Revolving Credit Facility: Increasing the credit facility by $300 million to a total of $800 million highlights the company's strong relationship with its lenders and the confidence these lenders have in Integer's financial health. This upsizing provides the company with greater financial flexibility to pursue strategic initiatives, fund potential acquisitions, or manage working capital more effectively. However, investors should also be mindful of the company's ability to manage and service this increased level of debt while maintaining its debt leverage target of 2.5 to 3.5.

Both these financial moves suggest a company that is bolstering its financial positioning in preparation for future growth, while also hedging potential risks. Retail investors should consider how these actions align with their investment strategy, particularly in relation to the company's long-term objectives and debt management capabilities.

Market Research Analyst

The announcement signals a proactive approach by Integer Holdings Corporation to enhance its financial flexibility and leverage market conditions.

The conversion window for the Convertible Senior Notes provides an insight into the company's stock performance. The terms suggest that stock prices have been robust, exceeding 130% of the conversion price. This can be an indicator of strong market confidence and potentially positive future performance. Investors might see this as a signal that the company is performing well and the market is valuing its growth prospects.

The expanded revolving credit facility reflects a strategic maneuver to ensure the company has ample liquidity. This increase by $300 million to an aggregate of $800 million could be seen as preparation for strategic investments or expansion plans. For retail investors, this is a positive indicator as it suggests that the company is not only looking to maintain stability but is also positioning itself for potential growth opportunities. This could translate into better competitive positioning and possibly higher returns in the long run.

While these financial strategies demonstrate confidence and forward-thinking, investors should also keep an eye on how these liabilities are managed and what specific strategies the company employs to leverage these funds. A balanced approach in utilizing the credit facility for productive investments will be important for sustained growth.

PLANO, Texas, July 01, 2024 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE: ITGR) (“Integer” or the “Company”), a leading medical device contract development and manufacturing organization, today notified holders of its 2.125% Convertible Senior Notes due 2028 (the “Notes”) that the Notes are convertible, at the option of the holders (the “Conversion Option”) beginning on July 1, 2024, and ending at the close of business on September 30, 2024. The Notes are convertible into cash, up to the principal amount of the Notes, and in cash, shares of the Company’s common stock or a combination thereof, at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the Notes being converted. Any determination regarding the convertibility of the Notes during future periods will be made in accordance with the terms of the Indenture governing the Notes.

The Notes became convertible because the last reported sale price of shares of the Company’s common stock, for at least 20 trading days during the period of 30 consecutive trading days ending on, and including, the last trading day of the calendar quarter ended June 30, 2024, was greater than 130% of the conversion price in effect on each applicable trading day.

The Notes are convertible at a conversion rate of 11.4681 shares of common stock per $1,000 principal amount of Notes, which is equivalent to a conversion price of approximately $87.20 per share of common stock.

The Company has issued a notice to holders with respect to the Conversion Option specifying the applicable terms, conditions and procedures. The notice is available through The Depository Trust Company or by requesting a copy from Wilmington Trust, National Association, which is serving as the conversion agent, at:

Wilmington Trust, National Association
1310 Silas Deane Highway
Wethersfield, CT 06109
Attn: Integer Holdings Corporation Notes Administrator

None of the Company, its Board of Directors or its employees has made or is making any representation or recommendation to any holder as to whether to exercise or refrain from exercising the Conversion Option.

This press release is not an offer to sell, nor a solicitation of an offer to buy securities, nor shall there be any sale of these securities in any state or jurisdiction in which the offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

Amended Credit Agreement

The Company also entered into an amendment to its existing credit agreement to increase the maximum borrowing capacity of the Company under its revolving credit facility by $300 million, from $500 million to $800 million.

“Given the strength of our balance sheet, we continue to enhance our sources of liquidity to provide flexibility in achieving our long-term strategic objectives, while remaining committed to our 2.5 to 3.5 debt leverage target,” said Diron Smith, Chief Financial Officer of Integer. "We appreciate the confidence expressed by our lenders through their ongoing commitment and support.”

About Integer^®

Integer Holdings Corporation (NYSE: ITGR) is one of the largest medical device contract development and manufacturing organizations (CDMO) in the world, serving the cardiac rhythm management, neuromodulation, and cardio and vascular markets. As a strategic partner of choice to medical device companies and OEMs, the Company is committed to enhancing the lives of patients worldwide by providing innovative, high-quality products and solutions. The Company's brands include Greatbatch Medical^®, Lake Region Medical^® and Electrochem^®. Additional information is available at www.integer.net.

Investor Relations:	Media Relations:
Andrew Senn	Kelly Butler
andrew.senn@integer.net	kelly.butler@integer.net
763.951.8312	469.731.6617

FAQ

When are Integer Holdings' 2.125% Convertible Senior Notes due 2028 convertible?

The notes are convertible from July 1, 2024, to September 30, 2024.

What is the conversion rate for Integer Holdings' convertible notes?

The conversion rate is 11.4681 shares of common stock per $1,000 principal amount of Notes.

What is the conversion price for Integer Holdings' convertible notes?

The conversion price is approximately $87.20 per share of common stock.

By how much has Integer Holdings increased its revolving credit facility?

Integer Holdings has increased its revolving credit facility by $300 million, bringing the total to $800 million.

What is Integer Holdings' target debt leverage ratio?

Integer Holdings aims to maintain a debt leverage target of 2.5 to 3.5.