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June 12, 2013 /PRNewswire/ -- Allscripts Healthcare Solutions, Inc. (NASDAQ: MDRX) ("Allscripts") today announced that it plans to make a private offering of $300 million aggregate principal amount of its Cash Convertible Senior Notes due 2020 (the "notes"). Allscripts also plans to grant the initial purchasers of the notes an option to purchase up to an additional $45 million aggregate principal amount of the notes. The notes will be 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 Allscripts expects to pay interest on the notes semiannually. 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 are expected to mature on July 1, 2020, unless earlier repurchased or converted into cash in accordance with their terms prior to such date. The interest rate, conversion rate and certain other terms of the notes will be determined by negotiations between Allscripts and the initial purchasers.
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 intends to enter into a series of transactions for the purpose of effectively increasing the conversion price of the notes. Specifically, Allscripts expects to enter into privately negotiated cash convertible note hedge transactions with one or more of the initial purchasers of the notes or their respective affiliates or other financial institutions (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 intends to enter into privately negotiated warrant transactions with the option counterparties at a strike price higher than the conversion price of the notes, which 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.