|
|
ROPES & GRAY LLP |
|
PRUDENTIAL TOWER | |
|
800 BOYLSTON STREET | |
|
BOSTON, MA 02199-3600 | |
|
WWW.ROPESGRAY.COM |
September 26, 2018
VIA EDGAR
Securities and Exchange Commission
Division of Corporation Finance
100 F. Street, N.E.
Washington, D.C. 20549
Attention: Craig Arakawa/Raj Rajan (Accounting)
David Link/ Michael Killoy (Legal)
Re: Osmotica Pharmaceuticals plc
Registration Statement on Form S-1
Filed September 14, 2018
File No. 333-227357
Ladies and Gentlemen:
This letter is being furnished on behalf of Osmotica Pharmaceuticals plc (the “Company”), with respect to the Company’s Registration Statement on Form S-1 (File No. 333-227357) that was filed with the Securities and Exchange Commission (the “Commission”) on September 14, 2018 (as may be further amended from time to time, the “Registration Statement”) in connection with the initial public offering (the “IPO”) of the Company’s ordinary shares.
During a telephone call with representatives of the Company, the Company’s independent auditor and Ropes & Gray LLP on September 26, 2018, the staff (the “Staff”) of the Commission requested that the Company provide the Staff with certain supporting materials related to the tables that appear in the “Capitalization” and “Dilution” sections on pages 70-73 of the Registration Statement (the “Capitalization and Dilution Tables”).
In response to the Staff’s request, the Company is supplementally providing the Staff with the supporting documentation set forth in Exhibit A, which the Company used to prepare the Capitalization and Dilution Tables. In addition, the Company is supplementally providing the Staff with the proposed changed pages to the Registration Statement set forth in Exhibit B, which represent the Company’s current estimates as to the amounts that will be included in the Capitalization and Dilution Tables.
* * * * *
We hope that the foregoing has been responsive to the Staff’s request. If you have any questions about this information, or if there is any additional information that we might provide to assist the Staff’s review, please contact the undersigned at (617) 951-7802.
|
|
Sincerely, |
|
|
|
|
|
|
|
|
/s/ Craig E. Marcus |
|
|
Craig E. Marcus |
cc: Christopher Klein (Osmotica Pharmaceuticals plc)
William Michener (Ropes & Gray LLP)
Exhibit A
Osmotica Pharmaceuticals plc Capitalization ‐ Pro Forma In Whole Dollars and Shares Assumptions: Base Offering Greenshoe Percent 8,300,000 15.0% Pre‐IPO Shares Reorganization Exchange Ratio 1,000,515 42.835079 Total Shares Pre‐IPO Shares Offered in IPO Midpoint Pricing range 42,857,139 8,300,000 15.00 $ Offering Size Underwriting Disc. Estimated Expenses $124,500,000 (8,715,000) (4,529,464) 7.0% Net Proceeds $111,255,536 Net Proceeds of Offering (from above) $111,255,536 Increase Cash Repay Term A Loan Repay Term B Loan $11,255,536 50,250,000 Partial Repayment 49,750,000 full repayment Total Sources $111,255,536 $111,255,536 Uses of Funds Sources of Funds
Osmotica Pharmaceuticals plc Capitalization ‐ Pro Forma Pro‐forma balance sheet ‐ repayment as of June 30, 2018 Dollars and Shares In thousands Calculation of Pro‐Forma Equity ‐ From Calcuation of Pro‐Forma Equity Above June 30, 2018June 30, 2018June 30, 2018 Actual ‐ As reported Pro‐Forma Pro‐Forma As Adjusted Partners Capital Ordinary Shares Nominal Value Additional Paid‐In Capital Retained Earnings Accumulated other comprehensive loss $421,316‐ ‐ 429512 420,887 530,611 ‐‐‐ (1,724) (1,724) (1,724) $419,592$419,592$529,399 Ordinary Shares Nominal Value (in whole dollars) Ordinary Shares Nominal Value Partners Capital (pre‐reorganization) Less: Ordinary Shares Nominal Value Post‐Reorg Additional Paid‐In Captial IPO Net Proceeds (Net of $83 nominal value of IPO Shares) Deferred Finance Fee Write‐Off (after tax) Pro‐Forma Additonal Paid In Capital Post Reorg/Pre IPO Post IPO IPO Shares 42,85751,1578,300 $0.01 $0.01 $0.01 $429$512$83 $421,316 (429) $420,887 $420,887 111,173 (1,449) $530,611 ($ Thousands) June 30, 2018 June 30, 2018 June 30, 2018 Actual ‐ As reportedPF AdjustmentsPro‐Forma As adjusted Source of PF Adjustments Cash Senior secured credit facility Term A Loan Term B Loan Total senior secured credit facilities Deferred financing fees Total senior secured credit facilities, net of deferred financing fees Current portion of Long Term Debt Senior secured credit facilities — long‐term portion Note payable — insurance financing Total long‐term indebtedness Total equity $28,408$11,256 $39,664 ‐ ‐ 273,657 (50,250) 223,407 49,750(49,750) ‐ From Sources and Uses of Funds From Sources and Uses of Funds From Sources and Uses of Funds Def'd financing fees allocated to repaid debt Current portion of LTD allocated to repaid debt IPO Proceeds less after tax deferred finance fee write‐off 323,407(100,000)223,407 (6,150) 1,902 (4,248) 317,257 (98,098) 219,159 (6,724)945 (5,779) 310,533(97,153)213,380 780780 311,313(97,153)214,160 $419,592 $109,807 $529,399
Osmotica Pharmaceuticals plc Dilution In Whole Dollars and Shares Assumed initial public offering price per share Net tangible book value per share at June 30, 2018 Increase per share attributable to new investors in this offering Pro forma net tangible book value per share after this offering Dilution per share to new investors Increase/ decrease $ 15.00 $ 16.00 (6.68) 1.49 (5.18) $ 14.00 (6.68) 1.19 (5.49) $ 15.00 (6.68) 1.80 (4.88) A/D (6.68) 1.34 (A‐C)/(D+E) (5.34) $ 20.34 $ 21.18 $ 19.49 $ 19.88 (0.15) 0.15 Supporting calculations Tangible book value Total net book value at June 30, 2018 Less: Goodwill Intangibles, net Deferred finance costs $ 419,592,101 From Financial Statements (Assets ‐ Liabilities) 152,815,716 546,713,905 6,149,564 From Financial Statements From Financial Statements From Financial Statements Footnote 8 Tangible book value at June 30, 2018 A $ (286,087,084) From Financial Statements Number of shares issued and outstanding at June 30, 2018 pre‐reorganization Reorganization Exchange Ratio Number of shares issued and outstanding at June 30, 2018 ‐ post reorganization 1,000,515 42.835079 From Financial Statements D 42,857,139 Assumed initial public offering price per share Number of shares offered in IPO Expected IPO proceeds ‐ gross Less: Underwriting Discount Estimated Expenses Expected IPO proceeds, net $ 15.00 8,300,000 124,500,000 $ 16.00 8,300,000 132,800,000 $ 14.00 8,300,000 116,200,000 $ 15.00 9,545,000 143,175,000 E $ $ $ $ 7.0% (8,715,000) (4,529,464) (9,296,000) (4,529,464) (8,134,000) (4,529,464) (10,022,250) (4,529,464) $ $ $ B $ 111,255,536 $ 118,974,536 $ 103,536,536 $ 128,623,286 Application of net proceeds of the offering ‐ repayment of debt Debt repayment Decrease of deferred financing costs Net increase in tangible book value due to the offering Net tangible book value ‐ post IPO Increase/ decrease Total number of shares ‐ post IPO B B ∑ B=C A‐C $ (100,000,000) 1,902,000 $ (100,000,000) 1,902,000 $ (100,000,000) 1,902,000 $ (100,000,000) 1,902,000 $ 13,157,536 $ 20,876,536 $ 5,438,536 $ 30,525,286 (272,929,548) (265,210,548) (280,648,548) (255,561,798) (7,719,000) 7,719,000 D+E $ 51,157,139 $ 51,157,139 $ 51,157,139 $ 52,402,139 Greenshoe 15% Sensitivity Greenshoe Sensitivity Mid‐point Calulation References
Exhibit B