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DexCom greenshoe exercised, lifts 0.75% convertibles to $850 million
By Devika Patel
Knoxville, Tenn., Dec. 3 – Underwriters for DexCom Inc.'s offering of 0.75% five-year convertible senior notes exercised their over-allotment option in full for $100 million more of the convertibles, increasing the size of the issue to $850 million on Nov. 30, the company said in an 8-K filed with the Securities and Exchange Commission.
As previously reported, the company sold the convertibles at par on Nov. 28 in a Rule 144A offering, via joint bookrunners J.P. Morgan Securities LLC, BofA Merrill Lynch and Leerink Partners LLC.
The convertibles have an initial conversion premium of 32.5% and an initial conversion price of $164.29, which equals a conversion ratio of 6.0869.
The notes are non-callable until Dec. 1, 2021 and then subject to a 130% hurdle until Sept. 1, 2023.
The notes are contingently convertible until Sept. 1, 2023.
The notes will be settled in cash, shares or a combination of both at the company’s option. The notes are putable upon a fundamental change.
In connection with the convertible notes offering, DexCom entered into convertible note hedge and warrant transactions on Nov. 30, according to the 8-K.
The strike price on the warrants is $198.38.
Net proceeds will be approximately $836 million now that the greenshoe was exercised.
Approximately $31 million of the proceeds were earmarked to cover the cost of the call spread and $100 million will be used for the repurchase of common stock.
The remainder are to be used for capital expenditures, for working capital and for general corporate purposes, including acquisitions and additional share repurchases.
DexCom is a San Diego-based manufacturer of glucose monitoring systems.
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