SALT LAKE CITY - Varex Imaging (NASDAQ:VREX) Corporation (NASDAQ:VREX), a manufacturer of X-ray imaging components with a market capitalization of $624 million, has priced a private offering of $125 million in senior secured notes. According to InvestingPro data, the company currently maintains strong liquidity with a current ratio of 3.32, though it faces profitability challenges with negative earnings in the last twelve months. The notes, carrying a 7.875% interest rate and due October 15, 2027, will be offered at 101.5% of their principal value, including accrued interest from their initial issue date.
The company revealed that the additional notes are part of the same series as the $300 million senior secured notes first issued on September 30, 2020. Currently, $243 million of these notes are outstanding, contributing to the company's total debt of $476.7 million. The new offering is scheduled to close on Friday, subject to customary closing conditions.
Varex intends to use the net proceeds to repay, in part, its outstanding Convertible Notes due in June 2025. This could involve repaying the notes at maturity or repurchasing a portion prior to their due date. In conjunction with this offering, Varex plans to terminate its $20 million Equipment Credit Agreement established on April 26, 2024.
The notes will be secured by a first priority interest in certain equipment, capital stock, intellectual property, and some real property, and a second lien on other assets, including inventory and accounts receivable. These guarantees will be provided by Varex's domestic and certain foreign subsidiaries that also guarantee the company's Revolving Credit Facility.
Varex has stipulated that the notes will not be registered under the Securities Act of 1933 or applicable state laws, and will only be offered to qualified institutional buyers and non-U.S. persons in compliance with specific regulations. The notes will come with restrictions on transferability and resale.
This news release contains forward-looking statements, including expectations regarding the closing of the offering and the intended use of proceeds. However, these statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations.
The information is based on a press release statement. Varex, with a 75-year history in the industry, employs approximately 2,300 people globally and is headquartered in Salt Lake City, Utah. For deeper insights into Varex's financial health and detailed analysis, investors can access comprehensive research reports and additional financial metrics through InvestingPro, which currently shows analyst price targets ranging from $16 to $30 per share.
In other recent news, Varex Imaging Corporation has announced the initiation of a private offering of $125 million in senior secured notes due October 15, 2027. This offering is an additional issuance to the company's existing 7.875% senior secured notes, of which $243 million currently remain outstanding. Varex plans to use the net proceeds from this offering towards the partial repayment of its outstanding Convertible Notes, due in June 2025. The company may also use the funds to repurchase a portion of the Convertible Notes before they mature. The new notes will be guaranteed by both existing and future domestic subsidiaries, as well as certain foreign subsidiaries. This offering is targeted at qualified institutional buyers and non-U.S. persons in compliance with Regulation S. In line with recent developments, several analysts, including those from InvestingPro, are expecting improved profitability from Varex in the coming year.
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