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Exact Sciences Plans $600M Senior Notes Offering

NEW YORK (GenomeWeb) – Exact Sciences announced late Thursday that it is planning an underwritten public offering of $600 million in 1.0 percent convertible senior notes due 2025.

The company has also granted the underwriter a 30-day option to purchase up to an additional $90 million of notes. The notes will be senior, unsecured obligations of the company and will bear interest at a rate of 1.0 percent per year. Interest will be payable semi-annually in arrears on Jan. 15 and July 15 of each year, beginning July 15, 2018, Exact said. The notes will be convertible into cash, shares of the company's common stock, or a combination of the two.

The initial conversion rate will be 13.2569 shares of the company's common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $75.43 per share. They will mature on Jan. 15, 2025.

The firm initially announced an offering of $500 million, with an option for the underwriter to purchase up to an additional $75 million of notes, but later upsized the deal after it was priced.

Exact said it intends to use the net proceeds of the offering for general corporate and working capital purposes.

BofA Merrill Lynch is acting as sole book-running manager for the offering, which is expected to close on Jan. 17. 

In December 2017, Exact inked $15 million revolving and $25.6 million non-revolving loan agreements with MB Financial Bank in order to finance the construction of a clinical laboratory and related facilities, and to conduct additional development of a 46-acre campus in Madison, Wisconsin. The firm also agreed to sell 7 million shares of its common stock at $35 per share in an underwritten public offering in June 2017, with the intention of using the proceeds to fund the expansion of commercialization activities for its colon cancer test, Cologuard.

Exact's shares fell nearly 5 percent to $52.44 in morning trading on the Nasdaq.