The San Diego, Calif.-based company said that it will also offer a 13-day option to buy up to an additional $100 million aggregate principal amount of notes to purchasers in the offering.
Notes offered in the round will mature on Dec. 1, 2023, Dexcom said in an SEC filing. The company said it plans to use up to $100 million of the net proceeds to repurchase shares, as well as pay the cost of the convertible hedge transactions.
Notes in the offering will have an initial conversion rate of 6.0869 shares of common stock per $1,000 in principal amount of notes, equivalent to an initial conversion price of approximately $164.29 per share. The conversion price represents a 32.5% premium based on the last reported sale of the company’s common stock yesterday of $123.99.
DexCom said that it estimates it will receive $737.6 million in net proceeds, or $836 million if the optional additional shares are purchased.
The company said that in connection with the offering, it also entered into convertible note hedge transactions with initial purchasers of the notes, or their affiliates. The deal is expected to reduce potential dilution on conversion, DexCom said. The company added that it also entered into warrant transactions with hedge counter parties and sold warrants for the purchase of its stock with an initial price of $198.38 per share, a 60% premium over the $123.99 share price.
The offering is expected to close on November 30, Dexcom said. Today, DexCom shares have fallen slightly, down 1.2% at $122.50 as of 10:38 a.m. EST.