Horizon Pharma Announces Pricing of $150 Million of 5.00% Convertible Senior Notes

Horizon Pharma Announces Pricing of $150 Million of 5.00% Convertible Senior 
Notes 
DEERFIELD, IL -- (Marketwired) -- 11/19/13 --  Horizon Pharma, Inc.
(NASDAQ: HZNP) ("Horizon" or the "Company") today announced that it
has entered into note purchase agreements with investors to issue
$150 million aggregate principal amount of 5.00% Convertible Senior
Notes due 2018 (the "Notes"). The initial conversion price of the
Notes will be $5.36, representing a conversion premium of
approximately 20% over the last reported sale price of Horizon's
common stock on the NASDAQ Global Market on November 18, 2013. In
connection with the pricing of the offering, the Company also entered
into capped call transactions described below, which are generally
intended to reduce the potential dilution to Horizon's common stock
upon conversion of the Notes, and thereby are expected to raise the
effective conversion premium of the Notes for Horizon to
approximately 50% over the last reported sale price of Horizon's
common stock on the NASDAQ Global Market on November 18, 2013. 
The purchase of the Notes is expected to close on November 22, 2013,
subject to the satisfaction of customary closing conditions. The
Notes will be issued at a price equal to 100% of the principal amount
thereof. The net proceeds from the sale of the Notes, after deducting
fees and expenses, are expected to be approximately $143.8 million.
Of the net proceeds from the offering, Horizon anticipates using
$18.7 million to pay the cost of the capped call transactions, $35.0
million to fund the Horizon's proposed acquisition of VIMOVO(R),
$70.4 million to repay all obligations under the Company's existing
senior secured loan, including required make-whole payments, and the
remainder of approximately $19.7 million for working capital and
general corporate purposes. 
The Notes will bear interest at a fixed rate of 5.00% per annum,
payable semiannually in arrears on May 15 and November 15 of each
year, beginning on May 15, 2014, and will mature on November 15,
2018, unless earlier repurchased or converted. 
The Notes will be convertible at the option of the holders at any
time prior to the close of business on the business day immediately
preceding August 15, 2018 only under certain conditions. On or after
August 15, 2018 u
ntil the close of business on the second scheduled
trading day immediately preceding the maturity date for the Notes,
holders will be able to convert their Notes at their option at the
conversion rate then in effect at any time, regardless of these
conditions. Subject to certain limitations, Horizon may settle
conversions of the Notes by paying or delivering, as the case may be,
cash, shares of its common stock or a combination of cash and shares
of its common stock, at its election. If Horizon undergoes a
fundamental change prior to the maturity date for the Notes, the
holders may require the Company to repurchase for cash all or any
portion of their notes at a price equal to 100% of the principal
amount of the notes to be repurchased, plus accrued and unpaid
interest. 
The initial conversion rate will be 186.4280 shares of common stock
for each $1,000 principal amount of Notes, which represents an
initial conversion price of approximately $5.36 per share of common
stock. The capped call transactions described below will increase the
effective conversion price of the Notes for Horizon to approximately
$6.71 per share. The conversion rate of the Notes, and the
corresponding conversion price, will be subject to adjustment for
certain events, but will not be adjusted for accrued and unpaid
interest. 
Horizon may not redeem the Notes prior to their maturity date, and
there is no sinking fund provided for the Notes. 
In connection with the pricing of the Notes, Horizon entered into
privately negotiated capped call transactions with certain financial
institutions (the "hedge counterparties"). The capped call
transactions are generally expected to reduce potential dilution to
Horizon's common stock upon conversion of the Notes in excess of the
principal amount of such converted Notes. The cap price of the capped
call transactions will initially be approximately $6.71, which
represents a premium of approximately 50% over the last reported sale
price of the Company's common stock on the NASDAQ Global Market on
November 18, 2013 and is subject to certain adjustments under the
terms of such capped call transactions. 
Horizon has been advised by the hedge counterparties that in
connection with establishing their initial hedges of the capped call
transactions, the hedge counterparties (or their affiliates) expect
to enter into various derivative transactions with respect to
Horizon's common stock concurrently with, and/or purchase shares of
Horizon's common stock shortly after, the pricing of the Notes. These
activities could have the effect of increasing, or reducing the size
of any decrease in, the price of the Notes and/or Horizon's common
stock. 
The offering of the Notes was limited to accredited investors and
qualified institutional buyers pursuant to Section 4(a)(2) of the
Securities Act of 1933, as amended (the "Securities Act") and
Regulation D promulgated thereunder. Neither the Notes nor any shares
of Horizon's common stock issuable upon conversion of the Notes have
been or are expected to be registered under the Securities Act or
under any state securities laws and, unless so registered, may not be
offered or sold in the United States or to U.S. persons except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and applicable
state securities laws. This press release does not constitute an
offer to sell, or the solicitation of an offer to buy, these
securities, nor will there be any sale of these securities in any
state or other jurisdiction in which such offer, solicitation or sale
is not permitted. 
About Horizon Pharma 
Horizon Pharma, Inc. is a specialty pharmaceutical company that has
developed and is commercializing products to primary care, orthopedic
surgeons and rheumatologists. The Company markets DUEXIS(R) and
RAYOS(R)/LODOTRA(R) and will market VIMOVO(R), which target unmet
therapeutic needs in arthritis, pain and inflammatory diseases. For
more information, please visit www.horizonpharma.com.  
Forward Looking Statements 
This press release contains forward-looking statements, including
statements regarding the expected acquisition of the U.S. rights to
VIMOVO, the expected closing of Horizon's offering of the Notes and
Horizon's receipt and use of the net proceeds therefrom, the terms of
the Notes and the anticipated impacts of the capped call
transactions. These forward-looking statements are based on
management's expectations and assumptions as of the date of this
press release and actual results may differ materially from those in
these forward-looking statements as a result of various factors.
These factors include, but are not limited to risks regarding the
closing of the acquisition and the offering of the Notes, Horizon's
ability to satisfy the closing conditions for the offering of the
Notes, and Horizon's ability to complete the offering of the Notes on
the anticipated terms, or at all. For a further description of these
and other risks facing the Company, please see the risk factors
described in the Company's filings with the United States Securities
and Exchange Commission, including those factors discussed under the
caption "Risk Factors" in those filings. Forward-looking statements
speak only as of the date of this press release and the Company
undertakes no obligation to update or revise these statements, except
as may be required by law. 
Contacts
Investors
Robert J. De Vaere
Executive Vice President and Chief Financial Officer
investor-relations@horizonpharma.com  
Media
Justin Jackson
Burns McClellan, Inc.
212-213-0006
jjackson@burnsmc.com 
 
 
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