As expected we did see some new issuance this week, but it was primarily small companies (which can be good or bad). Quidel Corp (QDEL) announced a $150 million senior convertible deal on Monday. QDEL is a small medical diagnostics company focused on infectious diseases, women's health, and gastrointestinal diseases. The company has been around for a long time, but seems to be limping along. The proceeds from the deal will provide needed permanent financing and allow management to explore acquisitions that might accelerate the diversification plans, but it remains to be seen how successful it will be. The HOCS (Hillside Overall Convertible Score) slash line for the issue was a lackluster 59 Overall / 69 Growth / 37 Safety.
On Wednesday Pros Holdings (PRO) announced a $125 million senior convertible deal. PRO is a small software company that focuses on "big data". The company serves the manufacturing, distribution, services, and travel industry by providing pricing and revenue management solutions. Management has been making acquisitions to grow its market presence. With competitors including SAP and Oracle, this is important to remain relevant. Proceeds from the convertible deal will be used to make additional acquisitions, which always come with risks. The HOCS slash line for the new issue is 60 Overall / 74 Growth / 31 Safety. An overall score of 60 for a new issue is nothing to get excited about and a 31 safety score is rather worrisome.
On Thursday ANI Pharmaceuticals (ANIP) announced a $100 million senior convertible deal. ANIP is a small drug company focused on narcotics, oncolytics (anti-cancers), hormones and steroids, and complex extended relief formulations. The company acquired two drugs - Lithobid and Vanocin - for $23 million earlier this year. The drugs have greatly exceeded expectations and the stock has reacted very positively, rising 647% in the last year. ANIP will also be using proceeds for acquisitions (the theme of the week). The new issue gets a very good HOCS slash line of 70 Overall / 83 Growth / 44 Safety.
Fiat Chrysler Automotive (FCAU) announced a $2.5 billion mandatory offering today. The mandatory will mature in December 2016, two years, which is a bit unusual. The deal looked to be pricing on the mids at 7.5s up 20. The company also announced it was offering 87 million shares.
We can't cover new issues for the week without mentioning Uber. The company raised $1.2 billion in new funds this week and is marketing a pre-IPO convertible bond. Terms are under wraps, but interest is obviously high.
For Bill's thoughts on the Uber convertible deal, among others, listen to his conversation with Kathleen Hays of Bloomberg earlier today click here for audio (his part starts at 14:14).
In other news this week, Callaway Golf (ELY) announced the CFO, Bradley Holiday, will retire in 2015 once his replacement has been named......... Jazz Pharmaceuticals (JAZZ) announced the first patients have been enrolled in a Phase 3 clinical trial to evaluate Xyrem (narcolepsy) in children and adolescents......... J2 Global (JCOM) provided updated fiscal year 2014 guidance with EPS guidance of $3.23 to $3.47 and revenue guidance of $580 to $600 million......... Molina Healthcare (MOH) has closed on the acquisition of Florida Medicaid assets from First Coast Advantage......... Verint (VRNT) released third quarter earnings beating on EPS and revenue......... Incyte (INCY) received FDA approval for Jakafi, a treatment for polycythemia vera (PV), a rare blood cancer.
Companies announcing earnings for this week include: PLAB for Monday, UTIW for Tuesday (pushed out from this week), RH for Wednesday, and CIEN for Thursday.