By Abigail W. Adams
Portland, Me., March 5 – iRhythm Technologies Inc. priced an upsized $575 million of long five-year convertible notes after the market close on Monday at par with a coupon of 1.5% and an initial conversion premium of 35%, according to a company news release.
Pricing came at the rich end of talk for a coupon of 1.5% to 2% and through the rich end of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC were bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $86.25 million.
The initial size of the offering was $450 million with a greenshoe of $67.5 million.
The notes are non-callable until March 5, 2027 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
The notes will be settled in cash, shares or a combination of both at the company’s option.
iRhythm lender and shareholder Braidwell LP intends to purchase a portion of the notes with a portion of the proceeds used to repay a loan from Braidwell.
In connection with the offering, the company entered into capped call transactions with a cap price of $218.10, which represents a 100% premium over the last reported sales price of the stock.
Net proceeds are expected to be $559.5 million or will be $643.6 million if the greenshoe is exercised in full.
Approximately $63 million of net proceeds will be used to cover the cost of the call spread, approximately $80.2 million will be used to repay the outstanding amount of a credit facility with Braidwell Transaction Holdings LLC and $25 million will be used to repurchase 229,252 shares of common stock in privately negotiated transactions with the initial purchasers of the notes.
Remaining proceeds will be used for general corporate purposes, which may include investments in and acquisitions of complimentary companies and technologies.
iRhythm Technologies is a San Francisco-based digital health care company.
| Issuer: | iRhythm Technologies Inc.
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| Amount: | $575 million
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| Greenshoe: | $86.25 million
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| Issue: | Convertible senior notes
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| Maturity: | Sept. 1, 2029
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| Bookrunners: | J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC
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| Coupon: | 1.5%
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| Price: | Par
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| Yield: | 1.5%
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| Conversion premium: | 35%
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| Conversion price: | $147.22
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| Conversion rate: | 6.7927
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| Call options: | Non-callable until March 5, 2027 and then subject to a 130% hurdle
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| Put options: | Upon a fundamental change
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| Pricing date: | March 4
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| Settlement date: | March 7
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| Distribution: | Rule 144A
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| Talk: | Coupon of 1.5% to 2% and initial conversion premium of 27.5% to 32.5%
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| Stock symbol: | Nasdaq: IRTC
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| Stock price: | $109.05 at market close March 4
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| Market capitalization: | $3.38 billion
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