Shockwave Medical, the subject of recent acquisition rumors, announces $650M private offering
Shockwave Medical, the California-based healthcare company known for its intravascular lithotripsy (IVL) technology, has announced a private offering of $650 million in convertible senior notes due in 2028. Private offerings help companies raise significant capital while avoiding some of the exhausting reporting requirements associated with public offerings.
The notes, available to “persons reasonably believed to be qualified institutional buyers,” would include an interest rate of 1% per year. Buyers also would have the option to purchase up to an additional $100 million in notes. All notes would represent “senior, unsecured obligations of Shockwave Medical” and be payable semi-annually in February and August of each year, beginning in 2024.
Under the terms of the sale, the earliest these notes would be redeemable is August 20, 2026. They would mature on August 15 if not converted, repurchased or redeemed earlier. The initial conversion rate is 3.4595 shares of Shockwave Medical stock per $1,000 principal of notes.
The private offering is expected to close on Tuesday, August 15. Shockwave Medical has estimated that the net proceeds from this offering will be up to $632.9 million, or $730.4 million if additional notes are purchased as outlined in the terms of the offering, after deducting “the initial purchaser’s discount and estimated offering expenses.”
How Shockwave Medical may spend the proceeds from its offering
The company expects to use approximately $83.5 million from this offering to pay for the cost of any capped call transactions. Its plans for the rest of the money appear to be fairly open-ended.
“Shockwave Medical intends to use the remainder of the net proceeds from the offering for general corporate purposes, which may include sales and marketing activities, medical affairs and educational efforts, research and development and clinical studies, and working capital, capital expenditures, and investments in and acquisitions of other companies, products or technologies in the future,” the company said. “However, Shockwave Medical has no commitments or specific plans with respect to any such investments in and acquisitions of other companies, products or technologies at this time.”
Read the full announcement from Shockwave Medical here.
Rumor rewind: Was Shockwave Medical close to being acquired?
According to anonymous sources familiar with the situation, Boston Scientific, Medtronic and Johnson & Johnson were all interested in acquiring the IVL specialists back in May. According to one report by Bloomberg, the deal Boston Scientific was considering would have been one of the largest acquisitions in its long history.
As things stand now, Shockwave Medical remains one of the most closely watched companies in all of healthcare.
Michael has more than 18 years of experience as a professional writer and editor. He has written at length about cardiology, radiology, artificial intelligence and other key healthcare topics.