Heart device maker HeartWare International Inc. said Thursday it plans to sell $100 million in senior notes due in 2016, and disclosed that its biggest shareholder is selling part of its stake in the company.
The news sent shares sliding $6.04, or 6.8 percent, to $82.86 in morning trading.
HeartWare will use proceeds from the debt offering for general corporate and working capital purposes, which could include expanding its manufacturing operations and licensing or investing in new products, technologies or businesses. HeartWare said the underwriters of the senior note offering will have the option to buy another $15 million in notes in the event demand exceeds initial supply.
The company also said Apple Tree Partners I LP is planning to sell 1 million shares of stock. The underwriters will have the option to buy another 150,000 shares. HeartWare won't receive any of the proceeds from that sale.
Apple Tree currently owns 2.7 million share of HeartWare, which represents a 19.3-percent stake in the company. Shares of HeartWare have nearly tripled in value over the last year. They rose 19 percent on Nov. 15 on positive clinical trial results for the company's ventricular assist system, and reached all-time high of $94.49 on Dec. 2. The company's HeartWare Ventricular Assist System is intended to be a bridge to heart transplantation for patients with end-stage heart failure.
JPMorgan Securities will be the book-running manager for both offerings.