Align Technology (Nasdaq:ALGN) announced today that it entered into a new, accelerated stock repurchase agreement with Goldman Sachs.
Tempe, Arizona-based Align agreed to repurchase $200 million of its common stock under its $1 billion stock repurchase program. The company initially announced its repurchase program in May 2021.
Shares of ALGN opened the day up 2.1% at $192.56 apiece.
In addition to the accelerated agreement, Align President and CEO Joe Hogan intends to personally purchase $2 million of Align’s common stock. That adds to the $2 million purchase he made in May.
Under the terms of the agreement, Align initially plans to receive approximately 849,000 shares. The final number of shares for repurchase rests upon the company’s volume-weighted stock price during the term of the repurchase program. Align intends to fund the transaction with cash on hand. It expects to complete the transaction by approximately Feb. 1, 2023.
As of Sept. 30, 2022, Align had approximately 78.2 million shares outstanding. It also had $1.1 billion in cash, cash equivalents and short-term and long-term marketable securities. As of that date, it repurchased more than 1.3 million shares of common stock at an average price of $416.39 apiece. That amounts to $550 million under the May 2021 $1 billion repurchase program.
Following the current accelerated repurchase, approximately $250 million remains available under the program.
Align’s “commitment” to increasing value
Align EVP, finance and CFO, John Morici, said the agreement reflects the company’s “commitment to increasing stockholder value and returning capital.” He added that it simultaneously invests in strategic growth drivers.
He said the company remains positioned to battle challenging market conditions. Its balance sheet includes more than $1 billion in cash and investment. It also features a healthy cash flow position and no long-term debt, he said.
“I am confident in the incredible under-penetrated market opportunity for digital orthodontics and restorative dentistry and the long-term value of Align,” Hogan said. “Regardless of the operating environment, we are committed to balancing investments to drive growth and long-term strategic priorities that will transform the practice of dentistry and strengthen our business. We will continue to invest in digital solutions and demand creation to help doctors and their patients, while working through the global macroeconomic challenges together.”