CAMBRIDGE, Mass.--(BUSINESS WIRE)--
Ironwood
Pharmaceuticals, Inc. (NASDAQ:IRWD) today announced the pricing of
$300 million aggregate principal amount of convertible senior unsecured
notes that will mature on June 15, 2022 (the Notes). The Notes are being
offered and sold to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended. Ironwood 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 solely to
cover over-allotments.
The Notes will bear cash interest at a rate of 2.25%, payable on June 15
and December 15 of each year, beginning on December 15, 2015. The Notes
will not be redeemable prior to maturity. The Notes will be convertible,
only during certain periods and subject to certain circumstances, into
cash, shares of Ironwood Class A common stock, or a combination of cash
and shares of Ironwood's Class A common stock, at Ironwood's election.
The initial conversion rate for the Notes is 60.3209 shares of
Ironwood's Class A common stock per $1,000 principal amount of the
Notes, which is equivalent to an initial conversion price of
approximately $16.58 per share of Ironwood's Class A common stock,
representing an approximately 35% conversion premium based on the last
reported sale price of Ironwood's Class A common stock of $12.28 per
share on June 9, 2015.
In connection with the pricing of the Notes, Ironwood also entered into
privately negotiated convertible note hedge transactions and warrant
transactions with certain financial institutions (the option
counterparties) in order to reduce the potential dilution with respect
to shares of Ironwood's Class A common stock upon any conversion of the
Notes and/or offset any cash payments Ironwood is required to make in
excess of the principal amount of converted Notes, in each case, up to a
threshold amount. The warrant transactions could have a dilutive effect
with respect to Ironwood's Class A common stock to the extent that the
market price per share of Ironwood's Class A common stock, as measured
under the terms of the warrant transactions, exceeds the applicable
strike price of the warrants on any expiration date of the warrants,
which is initially approximately 75% higher than the last reported sale
price of Ironwood's Class A common stock on June 9, 2015. If the initial
purchasers exercise their option to purchase additional Notes, Ironwood
expects to enter into additional convertible note hedge and warrant
transactions.
Ironwood estimates that the net proceeds of the offering will be
approximately $292 million (or approximately $336 million if the initial
purchasers' option to purchase additional Notes is exercised in full),
after deducting the initial purchasers' discounts and commissions, but
prior to deducting estimated offering expenses. Ironwood intends to use
the net proceeds of the offering to strengthen its balance sheet,
improve its capital structure and to fund general corporate purposes,
which may include the repayment or redemption of all or a portion of its
outstanding indebtedness and the acquisition of, or investment in,
businesses or other strategic assets, and to pay the cost of the
convertible note hedge transactions (after such cost is partially offset
by proceeds from the warrant transactions).
Ironwood has been advised that, in connection with the convertible note
hedge and warrant transactions, the option counterparties or their
respective affiliates expect to enter into various hedging transactions,
including (without limitation) derivative transactions, with respect to
Ironwood's Class A common stock and/or to purchase Ironwood's Class A
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 Ironwood's Class A common stock or the Notes at
that time. In addition, the option counterparties and/or their
respective affiliates may, from time to time, modify their hedge
positions by entering into or unwinding various hedging positions,
including (without limitation) derivative transactions, with respect to
Ironwood's Class A common stock and/or purchase or sell Ironwood's Class
A common stock or other securities of Ironwood in secondary market
transactions (and are likely to do so during any observation period
related to a conversion of the Notes). This activity could also cause a
decrease or offset or avoid an increase in the market price of
Ironwood's Class A common stock or the Notes.
The offer and sale of the Notes are not being registered under the
Securities Act, or any state securities laws. The Notes may not be
offered or sold in the United States except pursuant to an exemption
from the registration requirements of the Securities Act and any
applicable state securities laws.
This news release does not constitute an offer to sell or a solicitation
of an offer to buy the securities described herein, nor shall there be
any sale of these securities, in any state or jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the laws of such jurisdiction.
About Ironwood Pharmaceuticals
Ironwood Pharmaceuticals (NASDAQ: IRWD) is focused on creating medicines
that make a difference for patients, building value to earn the
continued support of our fellow shareholders, and empowering our team to
passionately pursue excellence. We discovered, developed and are
commercializing linaclotide, which is approved in the United States and
a number of other countries. Our pipeline priorities include exploring
further opportunities for linaclotide, as well as leveraging our
therapeutic expertise in gastrointestinal disorders and our
pharmacologic expertise in guanylate cyclases to address patient needs
across the upper and lower gastrointestinal tract. Ironwood was founded
in 1998 and is headquartered in Cambridge, Mass.
Any trademarks referred to in this press release are the property of
their respective owners. All rights reserved.
This press release contains forward-looking statements. Investors are
cautioned not to place undue reliance on these forward-looking
statements, including, but not limited to, statements regarding the
estimated net proceeds of the offering and Ironwood's anticipated use of
the net proceeds from the sale of the Notes. Each forward‐looking
statement is subject to risks and uncertainties that could cause actual
results to differ materially from those expressed or implied in such
statement. Applicable risks and uncertainties include, but are not
limited to, those related to whether or not Ironwood will be able to
consummate the offering and the hedge and warrant transactions on the
timeline or with the terms anticipated, if at all. In addition,
Ironwood's management retains broad discretion with respect to the
allocation of the net proceeds of this offering. Applicable risks also
include those that are listed under the heading "Risk Factors" and
elsewhere in Ironwood's Quarterly Report on Form 10-Q for the three
months ended March 31, 2015, in addition to the risk factors that are
included from time to time in Ironwood's Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, and any subsequent SEC filings. Ironwood
undertakes no obligation to update these forward-looking statements to
reflect events or circumstances occurring after this press release.
Except as otherwise noted, these forward-looking statements speak only
as of the date of this press release. All forward‐looking statements are
qualified in their entirety by this cautionary statement.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150610005389/en/
Ironwood Pharmaceuticals, Inc.
Media Relations
Trista
Morrison, 617-374-5095
Director, Corporate Communications
tmorrison@ironwoodpharma.com
or
Investor
Relations
Meredith Kaya, 617-374-5082
Director, Investor
Relations
mkaya@ironwoodpharma.com
Source: Ironwood Pharmaceuticals, Inc.
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