TransMedics (Nasdaq:TMDX) announced today that it intends to offer $300 million in convertible senior unsecured notes.
Andover, Massachusetts-based TransMedics develops organ transplant technology. It offers FDA-approved lung and heart transplant technology, such as the OCS Heart that received pre-market approval in April 2022.
The company’s offering remains subject to market and other conditions. The notes mature on June 1, 2028, unless earlier redeemed, repurchased or converted, according to a news release.
TransMedics expects to grant the initial purchasers an option to purchase up to an additional $45 million in notes. That option falls within a 13-day period beginning on and including the issuance date of the notes. The company intends to use a portion of its proceeds to pay the cost of certain capped call transactions.
With the remaining proceeds, TransMedics plans to expand its logistics network. This could come through potential partnerships or acquisitions. The company also intends to use proceeds for general corporate purposes.
Details of the Transmedics offering
The notes — senior, unsecured obligations of TransMedics — bear cash interest. Those are payable semiannually in arrears on June 1 and Dec. 1 of each year, beginning on Dec. 1, 2023. Notes remain convertible only during certain periods and subject to certain circumstances at TransMedics’ election. Prior to June 8, 2026, they will not be redeemable.
On or after that date, the company may redeem for cash all or a portion of the notes at its option. This may only occur if TransMedics’ common stock sale price totals at least 130% of the conversion price for at least 20 trading days during any 30 consecutive trading day period.
In connection with the pricing of the notes, the company expects to enter into privately negotiated capped call transactions. These take place with one or more initial purchasers and/or respective affiliates and/or other financial institutions.
TransMedics expects these transactions to reduce the potential dilution to its common stock upon the conversion of notes. If initial purchasers exercise their option to purchase additional notes, TransMedics expects to enter into additional capped call transactions.
