Kendle International Intends to Offer $150 Million of Convertible Senior Notes

CINCINNATI, July 9 /PRNewswire-FirstCall/ -- Kendle International Inc. , a global clinical research organization (CRO) that provides a broad range of Phase I-IV clinical development services to the biopharmaceutical industry, today announced it intends to offer, subject to market and other conditions, an aggregate of $150 million of Convertible Senior Notes due in 2012. The notes will be convertible, in certain circumstances, into a combination of cash and Kendle common stock. Upon conversion, holders will receive cash up to the principal amount of the notes to be converted, and any excess conversion value will be delivered in shares of the Company’s common stock. The Company intends to grant the underwriter an option to purchase up to an additional $22.5 million of convertible senior notes to cover over-allotments, if any.

In connection with the offering, Kendle intends to enter into convertible note hedge transactions with certain dealers. These transactions are intended to reduce the potential dilution to the Company’s shareholders upon any future conversion of the notes. The Company also intends to enter into warrant transactions concurrently with the offering, pursuant to which it intends to sell warrants to purchase Kendle common stock to the same dealers that intend to enter into the convertible note hedge transactions.

In connection with the convertible note hedge transactions, it is expected that the dealers that are party to such transactions, or their affiliates, will enter into various derivative or other transactions with respect to Kendle common stock. In addition, following pricing of the offering of the notes, such parties or their affiliates may continue to enter into, or to unwind, various derivatives transactions with respect to Kendle common stock and/or to purchase or sell shares of Kendle common stock in secondary market transactions, including during the cash settlement averaging period relating to a conversion of the notes.

The Company intends to use the remaining net proceeds from this note offering for the repayment of debt under its credit agreement and for general corporate purposes, which may include working capital and acquisitions or investments in businesses, products or technologies complementary to its own.

UBS Investment Bank is acting as sole book-running manager in connection with the offering.

The public offering of the Company’s convertible senior notes will be made only by means of a prospectus under the Company’s existing $300 million shelf registration statement. The preliminary prospectus and accompanying prospectus relating to the offering have been filed with the Securities and Exchange Commission and are available on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus and accompanying prospectus also may be obtained from UBS Investment Bank, Attention: Prospectus Department, 299 Park Avenue, New York, New York, 10171, (888) 827-7275.

This press release does not constitute an offer to sell or solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Kendle

Kendle International Inc. is a global clinical research organization that provides a broad range of Phase I-IV clinical development services to the biopharmaceutical industry.

Information provided herein which is not historical information may include forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are based largely on management’s expectations and are subject to and qualified by risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, without limitation, competitive factors and industry consolidation, outsourcing trends in the pharmaceutical and biotechnology industries, the Company’s ability to manage growth and to continue to attract and retain qualified personnel, the Company’s ability to complete additional acquisitions and to integrate newly acquired businesses, the Company’s ability to penetrate new markets, the fixed price nature of contracts and cost overruns, the loss, cancellation or delay of contracts or amendments thereto, the ability to maintain existing customer relationships or enter into new ones, the Company’s sales cycle, the effects of exchange rate fluctuations, risks related to non-US operations and other factors described in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Kendle International Inc.

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