Allscripts Prices $300 Million of Cash Convertible Senior Notes

CHICAGO, June 13, 2013 /PRNewswire/ — Allscripts Healthcare Solutions, Inc. (NASDAQ: MDRX) (“Allscripts”) today announced that it has priced and agreed to sell to initial purchasers in a private offering $300 million aggregate principal amount of its Cash Convertible Senior Notes due 2020 (the “notes”). Allscripts has also granted the initial purchasers of the notes an option to purchase up to an additional $45 million aggregate principal amount of the notes.  The notes are being offered only to qualified institutional buyers (as defined in the Securities Act of 1933, as amended (the “Securities Act”)), pursuant to Rule 144A under the Securities Act.

The notes are unsecured and bear interest at a rate of 1.25% per year, payable semiannually on January 1 and July 1 of each year, commencing on January 1, 2014. The notes will be convertible at the option of the holders into solely cash in certain circumstances and during certain periods.  The notes will not be convertible into Allscripts’ common stock or any other securities under any circumstances.  Allscripts will not have the right to redeem the notes prior to maturity.  The notes will mature on July 1, 2020, unless earlier repurchased or converted into cash in accordance with their terms prior to such date.  The conversion rate for the notes will initially be 58.1869 shares of Allscripts’ common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $17.19 per share of Allscripts’ common stock. The initial conversion price of the notes represents a premium of approximately 30% to the $13.22 per share last reported sale price of Allscripts’ common stock on June 12, 2013.  The offering of the notes is expected to close on June 18, 2013, subject to customary closing conditions.

Allscripts expects to use the net proceeds from the offering to pay the cost of the cash convertible note hedge transactions described below (after such cost is partially offset by the proceeds to Allscripts from the warrant transactions).  Allscripts intends to use substantially all of the remainder of the net proceeds from the offering in order to repay a portion of its outstanding indebtedness.

In connection with the pricing of the notes, Allscripts entered into a series of transactions for the purpose of effectively increasing the conversion price of the notes. Specifically, Allscripts entered into privately negotiated cash convertible note hedge transactions with certain of the initial purchasers of the notes or their respective affiliates (the “option counterparties”).  The cash convertible note hedge transactions are expected to reduce Allscripts’ exposure to potential cash payments due upon conversion of the notes in excess of the principal amount thereof.  Allscripts also entered into privately negotiated warrant transactions with the option counterparties with an initial strike price of $23.1350 per share, subject to certain adjustments, which represents a premium of approximately 75% to the $13.22 per share last reported sale price of Allscripts’ common stock on June 12, 2013.  The warrant transactions could have a dilutive effect to the extent that the price of Allscripts’ common stock exceeds the applicable strike price of the warrants. If the initial purchasers exercise their option to purchase additional notes, Allscripts may increase the size of the cash convertible note hedge transactions and enter into additional warrant transactions.

In connection with establishing their initial hedge of the cash convertible note hedge and warrant transactions, the option counterparties or their affiliates expect to enter into various derivative transactions with respect to Allscripts’ common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Allscripts’ common stock or the notes at that time. In addition, the option counterparties or their affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Allscripts’ common stock and/or purchasing or selling Allscripts’ common stock or other securities of Allscripts in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during any observation period related to a conversion of the notes). This activity could also cause or avoid an increase or a decrease in the market price of Allscripts’ common stock or the notes.

The notes will not be registered under the Securities Act. The notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.

This press release is not an offer to sell, or a solicitation of an offer to purchase, any securities of Allscripts. It is issued pursuant to Rule 135c under the Securities Act.

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