NeoGenomics announced that it has commenced a private offering of $275 million aggregate principal amount of convertible senior notes due 2032, with the oncology diagnostics company also granting initial purchasers an option to acquire up to an additional $41.25 million of notes.
The Fort Myers, Florida-based company said the notes will be senior unsecured obligations carrying semi-annual interest payments and maturing on July 1, 2032, unless earlier converted, redeemed or repurchased. The interest rate, initial conversion rate and other terms will be determined when the offering is priced.
NeoGenomics said it intends to enter into capped call transactions with one or more financial institutions in connection with the offering. The transactions are designed to reduce potential dilution to shareholders and offset possible cash payments above the principal amount of converted notes, subject to a cap.
The company plans to use a portion of the net proceeds to fund the capped call transactions and, together with cash on hand, repurchase part of its outstanding 0.25% convertible senior notes due 2028. NeoGenomics also said it may use up to $25 million to repurchase shares of its common stock from certain purchasers of the new notes, with any remaining proceeds earmarked for general corporate purposes.
NeoGenomics noted that the repurchases of existing notes and shares could support its stock price and potentially result in a higher initial conversion price for the new notes.
The notes will be offered only to qualified institutional buyers under Rule 144A of the Securities Act and will not be registered with the U.S. Securities and Exchange Commission.
Headquartered in Fort Myers, NeoGenomics provides oncology-focused genetic testing and diagnostic services used by oncologists, pathologists, hospital systems, academic centers and pharmaceutical companies. The company operates a network of CAP-accredited and CLIA-certified laboratories across the United States and maintains a full-service laboratory in Cambridge, United Kingdom.
The proposed financing comes as NeoGenomics continues to expand its precision medicine and cancer diagnostics capabilities while managing its capital structure and pursuing broader corporate initiatives.
