Repligen Corp. agreed to issue $1 billion of new convertible notes, using about half to retire most of a 2028 issue and raising the rest in cash, as the bioprocessing equipment maker pushes out its debt maturities and makes room for more acquisitions.
The Waltham, Mass., company will sell 0.25% convertible senior notes due 2031 through privately negotiated deals with existing bondholders and new investors. About $541.4 million of the new notes will be exchanged for roughly $456.8 million of its 1% convertible notes due 2028, and about $458.6 million will be issued for cash. After the transactions, which are expected to close around Nov. 6, about $143.2 million of the 2028 notes will remain outstanding.
Terms
The notes can be converted into Repligen shares at about $226.37 each, a 20% premium to the stock’s $188.64 close on Oct. 29. Cutting the coupon from 1% to 0.25% on most of the refinanced debt lowers interest costs, and the company said the deal should add modestly to adjusted earnings per share this year, with a bigger benefit in 2027.
Repligen plans to use about $120 million of the cash proceeds to repurchase its own shares from some of the note buyers at the Oct. 29 closing price, a common way to offset the hedging that convertible investors do by selling stock short. The placement agent, J. Wood Capital Advisors, also expects to buy about $30 million of stock from participants. The rest of the money is earmarked for working capital and general corporate purposes, including possible acquisitions or investments.
Room for deals
Chief Financial Officer Jason Garland said the transactions address the 2028 maturity early, extend the company’s debt profile and give it more capacity for both internal investment and acquisitions. Repligen, which supplies filtration, chromatography and other equipment used to make biologic drugs, is currently integrating BioLife, a recent purchase that expanded its offerings for cell-therapy manufacturers.
