SAN DIEGO, Apr 20, 2015 (BUSINESS WIRE) — DJO Global, Inc. (“DJO” or the “Company”), a leading global provider of medical device solutions for musculoskeletal health, vascular health and pain management, today announced that its indirect wholly owned subsidiary, DJO Finco Inc. (“Finco”), intends to offer, in a private offering subject to market and other conditions, $1,045 million aggregate principal amount of second lien notes due 2021 (the “Notes”). Finco is a newly-formed Delaware corporation and wholly owned subsidiary of DJO Finance LLC (“DJOFL”) that was created solely to act as the initial issuer of the Notes. Unless certain offering conditions, including the closing of our new senior secured credit facilities, are satisfied substantially concurrently with the closing of the offering, the gross proceeds from the offering will be funded into escrow. If the conditions for escrow release are not satisfied on or prior to a special mandatory redemption date of May 21, 2015, the Notes will be subject to a special mandatory redemption at a redemption price of 100% of the initial issue price of the Notes, plus accrued and unpaid interest to, but excluding, the redemption date.
Upon satisfaction of the conditions for escrow release, Finco will merge with and into DJOFL, with DJOFL as the surviving entity. DJOFL will assume by operation of law all of Finco’s obligations under the Notes and the related indenture (the “Assumption”), and the proceeds from the offering will be used, together with the borrowings under our new senior secured credit facilities and cash on hand, to (i) redeem DJOFL’s $330 million aggregate principal amount of 8.75% second priority senior secured notes due 2018, $440 million aggregate principal amount of 9.875% senior notes due 2018 and $300 million aggregate principal amount of 7.75% senior notes due 2018; (ii) repay amounts outstanding under our existing senior secured credit facilities; and (iii) pay all related fees and expenses. Upon the Assumption, DJO Finance Corporation, a wholly owned subsidiary of DJOFL, will become a co-issuer of the Notes. Prior to the Assumption, the Notes will not be guaranteed. Following the Assumption, the Notes will be guaranteed by all existing and future domestic subsidiaries that will guarantee our new senior secured credit facilities. Prior to the Assumption, the Notes will be senior secured obligations of Finco, secured only by a first priority lien on the funds in the escrow account. Following the Assumption, the Notes and related guarantees will be secured by (i) second-priority liens on the collateral that will secure our new senior secured term loan facility on a first-priority basis and (ii) third-priority liens on the collateral that will secure our new asset-based revolving credit facility on a first-priority basis, in each case subject to permitted liens.
The securities will be offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States under Regulation S of the Securities Act. The initial issuance and sale of the securities will not be registered under the Securities Act, and the securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.