This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Safeguard Scientifics Repurchases $46.9 Million Of 10.125% Convertible Senior Debentures Due 2014

Stocks in this article: SFE

Safeguard Scientifics, Inc. (NYSE:SFE), a holding company that builds value in growth-stage life sciences and technology companies, today announced that the Company has repurchased essentially all of the $46.9 million in face value of its previously outstanding 10.125% convertible senior debentures due 2014 (the “2014 Debentures”) (CUSIP 786449AH1). In addition, the Company consummated its previously announced private placement of 5.25% convertible senior debentures due 2018 (the “2018 Debentures”). The initial purchaser in the private placement exercised its option to purchase additional debentures bringing the total gross proceeds to $55.0 million. Proceeds from the offering of the 2018 Debentures were used to repurchase the 2014 Debentures.

“These transactions strengthen our long-term financial position by retiring higher-cost, lower conversion price debt, thereby reducing potential dilution and lowering annual interest payments by approximately $1.9 million,” said Stephen T. Zarrilli, President and Chief Executive Officer at Safeguard.

The 2014 Debentures were repurchased at a price as a percentage of face value of 125.25, plus accrued interest, for a total cost of $59.5 million. After these transactions, Safeguard’s outstanding long-term debt will be $55.5 million in face value.

Issued in March 2010, the 2014 Debentures were convertible into shares of Safeguard common stock, cash or a combination of stock and cash at an initial conversion rate of approximately 60.6 shares per $1,000 principal amount, equivalent to a conversion price of approximately $16.50 per share of Safeguard common stock. The 2018 Debentures (CUSIP 786449AJ7) are convertible into shares, cash or a combination of stock and cash at an initial conversion rate of 55.17 shares of Safeguard common stock per $1,000 of principal amount, or an initial conversion price of approximately $18.13 per share.

“The 2018 Debentures allow Safeguard to satisfy any conversion with cash and/or stock at our option, retaining maximum financial flexibility,” Zarrilli continued. “We believe we are even more strongly positioned as a result of these transactions. By creating this greater financial flexibility, we can be aggressive as our deal teams identify opportunities to expand the number of Safeguard’s partner companies. These transactions do not change our game plan with respect to our core business—to deploy equity capital in certain types of life science and technology companies. Our target deployment range is $5 to $15 million of initial capital per partner company, with appropriate reserves for follow-on funding.”

Stifel Nicolaus Weisel acted as the Company's exclusive financial advisor in connection with the transactions.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,574.57 +217.70 1.25%
S&P 500 2,034.30 +21.41 1.06%
NASDAQ 4,697.1520 +52.84 1.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs