Key Takeaways:
- Adaptive upsized its convertible notes offering to $300M from $250M
- Net proceeds of $290.8M will fund capped calls, a $25M buyback, and debt repayment
- The notes carry a 0% coupon with a conversion price of $24.11, a 40% premium
Back
Adaptive Biotechnologies prices $300M convertible notes with share buyback
Adaptive Biotechnologies priced a $300M zero-coupon convertible notes offering, upsized from $250M, with a concurrent $25M share repurchase.
The company will use about $22.3M of the net proceeds to enter into capped call transactions with a $34.44 cap price, a 100% premium to the $17.22 closing price on June 16. Another $25M will repurchase 1,451,800 shares in privately negotiated transactions through one of the initial purchasers. The remainder will repay the OrbiMed Purchase Agreement and fund general corporate purposes and opportunistic initiatives in the minimal residual disease business, Adaptive said in a statement.
The notes mature July 1, 2031, and are convertible at an initial rate of 41.48 shares per $1,000 principal, implying a conversion price of $24.11 — 40% above the reference stock price. Noteholders can convert only upon certain events before April 1, 2031, and at any time thereafter. Adaptive may redeem the notes for cash from July 1, 2029, if the stock trades above 130% of the conversion price for a specified period. The offering is expected to settle June 22.
The financing gives Adaptive additional financial flexibility as it pursues growth in its MRD diagnostics business. The company also granted initial purchasers an option to buy up to $45M in additional notes within 13 days, which would bring total net proceeds to $334.5M. J. Wood Capital Advisors, Adaptive's financial advisor on the deal, agreed to purchase about $10M of shares concurrently with the offering.
This article is for informational purposes only and does not constitute investment advice.
