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DexCom prices $1.05B ‘upsized’ offering

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Dexcom updated logoContinuous glucose monitoring system developer Dexcom (NSDQ:DXCM) announced today that it priced an upsized offering worth $1.05 billion in convertible senior notes.

Yesterday, the San Diego-based company announced an offering worth $850 million with plans to offer note purchasers a 13-day option to buy up to an additional $150 million aggregate principal amount of notes. Today, DexCom increased the aggregate principal amount and granted a 13-day option to purchase up to an additional $157.5 million in notes.

DexCom is offering senior, unsecured obligations with an interest rate of 0.25% per year. The notes will mature on Nov. 15, 2025. The company expects the sale of the notes to close on May 14, 2020, according to a news release.

Before 5 p.m. ET on the business day immediately preceding Aug. 15, 2025, the notes will be convertible at the option of the holders. Upon conversion, they may be settled in shares of DexCom’s common stock, cash, or a combination of the two at a conversion rate of 1.6655 shares of common stock per $1,000 principal amount of notes.

DexCom anticipates a windfall of $1.03 billion with a possibility of reaching $1.19 billion if the initial purchasers exercise their option to purchase additional notes in full. The company intends to use $282.6 million of the net proceeds and issue more than 1.95 million shares of its common stock to repurchase or exchange approximately $260million of its existing 0.75% convertible senior notes due in 2022.

The intended use of the remainder of the proceeds includes capital expenditures, working capital and general corporate purposes.

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