JWCA advises intermune on a partial exchange of their 2.5% convertible notes due 2017 and 5.0% convertible notes due 2015 for a total consideration of $385 million
july 2014 | read company announcement
Transaction Background
J. Wood Capital Advisors was hired by InterMune to evaluate its capital structure. The recommendation was to reduce debt by exchanging the 2.50% Convertible Notes due 2017 and 5.00% Convertible Notes due 2015 into common equity. In the exchange, JWCA:
Assisted the InterMune team with comparative analytics around exchange consideration strategies: (1) all cash, (2) mix of cash + shares, (3) all shares
Specifically designed the strategy, investor outreach and execution process to meet the company’s objectives
Designed the exchange strategy in order to mitigate impact on the company's stock price
Focused on preserving cash
Minimize cost of execution
Assisted the team with documentation, accounting and tax review
Led the negotiation with investors
“Jason led our convertible exchange. He did the analysis, developed the strategic approach and led the execution of the strategy. He did a superior job for considerably less than prior fees paid.”
Results
The company executed a successful convertible exchange of their 2.50% Convertible Notes due 2017
Exchanged ~80% of their 2.50% Convertible Senior Notes due 2017
Premium paid was $32.50 per bond, which was only $7.50 per bond above the remaining coupons (+0.21% cost to the company)
Price was well below the initial offer from investors of $50 per bond
The company also executed a successful convertible exchange of their 5.00% Convertible Notes due 2015
Exchanged majority of their 5.00% Convertible Senior Notes due 2015
Premium paid was an equivalent $7.50 per bond above the remaining coupons
Total impact:
Reduced debt by $113mm at a total cost of ~21bps, while the stock was near a 52-week high