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News Releases
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Chemed Corporation Announces Proposed Offering of $160 Million Senior Convertible Notes

CINCINNATI--(BUSINESS WIRE)--May 7, 2007--Chemed Corporation ("Chemed")(NYSE:CHE) today announced that it intends to offer, subject to market conditions and other factors, up to $160 million aggregate principal amount of senior convertible notes due 2014 (the "Notes") to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The Company also intends to grant the initial purchasers an option to purchase an additional $24 million aggregate principal amount of such Notes. As this offering is a private placement, it will not be made to the general public.

The Notes will be unsecured, unsubordinated obligations of the Company, will pay interest semi-annually, and will be convertible upon satisfaction of certain conditions. The Notes will be convertible into cash up to the principal amount of the Notes and, with respect to any excess conversion value, into shares of the Company's capital stock. Holders of the Notes will have the right to require the Company to repurchase for cash all or some of their Notes upon the occurrence of certain events. The interest rate, conversion rate and other terms are to be determined by negotiations between the Company and the initial purchasers.

The Company expects to enter into convertible note hedge transactions with affiliates of the initial purchasers of the Notes (the "hedge counterparties") and intends to use a portion of the net proceeds from this offering to pay for the convertible note hedge transactions. The Company also expects to enter into separate warrant transactions with the hedge counterparties, which would result in additional proceeds to the Company, and would partially offset the cost of the convertible note hedge transactions. In connection with the convertible note hedge and warrant transactions, the hedge counterparties have advised the Company that they or their affiliates may enter into various derivative transactions with respect to the capital stock of the Company, concurrently with or shortly following pricing of the Notes. These activities could have the effect of increasing or preventing a decline in the price of the capital stock of the Company concurrently or following the pricing of the Notes. In addition, the hedge counterparties or their affiliates may from time to time, following the pricing of the Notes, enter into or unwind various derivative transactions with respect to the capital stock of the Company and/or purchase or sell capital stock of the Company in secondary market transactions. These activities could have the effect of decreasing the price of the capital stock of the Company and could affect the price of the Notes during any averaging period related to the conversion of Notes.

In addition, the Company expects to use a portion of the net proceeds of this offering to repurchase approximately $100 million of its capital stock in negotiated transactions from institutional investors concurrently with this offering and in open market transactions after the completion of the offering. On April 30, 2007, the Company announced that its Board of Directors increased the Company's stock repurchase authorization to $163.6 million. On May 3, 2007 and May 4, 2007, respectively, the Company purchased an aggregate of 118,500 shares of its capital stock for approximately $6.9 million at prices ranging from $57.12 per share to $59.00 per share. As a result of purchases since April 30, 2007, $156.7 million is available for future Chemed stock repurchases. The Company intends to continue such repurchases, subject to market conditions and other factors. The Company intends to use the remaining net proceeds to repay borrowings under its revolving credit facility.

If the initial purchasers exercise their over-allotment option, or if the Company otherwise has proceeds remaining, the Company may use a portion of such net proceeds for general corporate purposes, or to enter into additional convertible note hedge transactions, or to repurchase additional shares of its capital stock in the open market or in negotiated transactions.

The Notes and the shares of capital stock issuable upon conversion of the Notes will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.

This announcement does not constitute an offer to sell or the solicitation of offers to buy any security and shall not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Statements in this press release or in other Chemed communications may relate to future events or Chemed's future performance. Such statements are forward-looking statements and are based on present information Chemed has related to its existing business circumstances. Investors are cautioned that such forward-looking statements are subject to inherent risk that actual results may differ materially from such forward-looking statements. Further, investors are cautioned that Chemed does not assume any obligation to update forward-looking statements based on unanticipated events or changed expectations.

CONTACT: Chemed Corporation
David P. Williams, 513-762-6901

SOURCE: Chemed Corporation

All information current at time of original publication. Read complete disclaimer for details.
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Page last modified: 04/18/05