Tandem Diabetes Care (Nasdaq:TNDM) announced today that it priced an offering of convertible senior notes worth $275 million.
The San Diego-based automated insulin delivery technology developer plans to sell the notes, due 2029, to qualified institutional buyers. It upsized the offering from the previously announced $250 million aggregate principal amount. The company also offered initial purchasers the option to purchase, within the 13-day period following issuance, $41.25 million in additional notes.
Tandem expects the offering to close on March 8, subject to customary closing conditions. Its notes accrue interest, payable semiannually in arrears on March 15 and Sept. 15, of 1.5% per year. They mature on March 15, 2029, unless earlier converted, redeemed or repurchased.
According to a news release, Tandem expects $266.3 million in proceeds. That could reach up to $306.4 million if the purchasers exercise their option to buy additional notes. The company expects to use net proceeds, plus cash on hand, to pay the $13.8 million cost of capped call transactions related to the offering.
Additional uses of proceeds include repurchasing approximately $246.7 million of its 2025 notes. Finally, it aims to repurchase approximately $30 million in common stock.
If the initial purchasers exercise their option, the company could use further proceeds to enter into more capped call transactions.
A large cash infusion marks the latest positive in a string of them for Tandem Diabetes Care.
Tandem recently made great strides on its CGM integration, becoming the first to pair an automated insulin delivery to Dexcom’s latest technology when it integrated G7 into the t:slim X2 in December. The company then became the first to add Abbott’s CGM to AID technology by integrating the FreeStyle Libre 2 Plus into the t:slim X2.
Last month, the company also launched its new insulin pump, the Tandem Mobi, further expanding its offerings.