MADISON, Wis. - Exact Sciences Corp. (NASDAQ:EXAS), a provider of cancer screening and diagnostic tests, announced on Monday that it has entered into agreements to issue $620.7 million in new convertible senior notes and retire part of its existing debt.
The transaction involves the exchange of $359.7 million of its current 0.375% convertible senior notes due 2028 and an additional cash payment to the company of approximately $266.8 million.
The new 1.75% convertible senior notes, due in 2031, are set to close on April 17, 2024, assuming all customary conditions are met. These notes will pay interest semi-annually and are convertible under specific conditions until their maturity date.
The initial conversion rate is set at 10.0644 shares per $1,000 principal amount, which equates to a conversion price of around $99.36 per share, a 35% premium over the company's last reported stock price.
The company has also retained the right to redeem these new notes after April 17, 2029, under certain conditions. If a "fundamental change" occurs, note holders may require Exact Sciences to repurchase their notes at full principal value plus any accrued interest.
XMS Capital Partners LLC served as the sole placement agent for the transaction, and legal representation was provided by K&L Gates LLP for Exact Sciences and Kramer Levin Naftalis & Frankel LLP for the placement agent.
The issuance and sale of the new notes and any common stock that may be converted from them have not been registered under the Securities Act of 1933 or other securities laws. Therefore, they cannot be offered or sold without an exemption or a transaction not subject to registration requirements.
This financial move comes as part of Exact Sciences' ongoing efforts to manage its capital structure and invest in its product pipeline, which includes the Cologuard® and Oncotype® tests. The company aims to provide innovative solutions for cancer diagnosis and treatment.
The information in this article is based on a press release statement from Exact Sciences Corp.
InvestingPro Insights
As Exact Sciences Corp. (NASDAQ:EXAS) navigates its capital restructuring with the recent announcement of issuing new convertible senior notes, a closer look at the company's financial health and market performance is essential for investors. The latest metrics from InvestingPro reveal a mixed financial landscape for the diagnostic test provider.
The company's market capitalization stands at a robust $13.36 billion, indicative of its significant market presence. However, the financial data reflects some challenges, with a negative P/E ratio (Price-to-Earnings) of -47.85 for the last twelve months as of Q4 2023, suggesting that the company is not currently profitable. Additionally, the company's revenue growth remains strong, with a 19.93% increase over the last twelve months as of Q4 2023.
InvestingPro Tips highlight that analysts have recently revised their earnings expectations downwards for the upcoming period, and they do not foresee profitability for the company this year. On a positive note, Exact Sciences' liquid assets surpass its short-term obligations, providing some financial flexibility. Despite not being profitable over the last twelve months, the company has experienced a strong return over the last month, reflecting investor optimism.
For investors looking to delve deeper into Exact Sciences' financials and future prospects, InvestingPro offers additional insights. There are currently six more InvestingPro Tips available, which could further inform investment decisions. Interested readers can access these tips at: https://www.investing.com/pro/EXAS. To enhance your InvestingPro experience, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.