Exact Sciences enters exchange agreement for 0.375% convertibles

By Mary-Katherine Stinson

Lexington, Ky., April 11 – Exact Sciences Corp. entered a privately negotiated exchange and purchase agreement on April 10 with certain holders of the company’s 0.375% convertible senior notes due 2028, according to a press release.

According to the agreement, the company has agreed to issue to the holders $620.7 million total principal amount of a new series of 1.75% convertible senior notes due April 15, 2031 in exchange for $359.7 million aggregate principal amount of the holder’s existing 2028 notes and approximately $266.8 million in cash.

The new notes are contingently convertible until Oct. 15, 2030.

On or after April 17, 2029, the company may redeem all or any portion of the new notes at par plus accrued interest.

The conversion rate for the 2031 notes is initially 10.0644 shares per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $99.36 per share of common stock representing a conversion premium of 35% over the last reported sale price of $73.60 per share on the Nasdaq on April 10.

In addition, holders of the new notes who convert them in connection with a make-whole fundamental change or redemption, will be entitled to an increase in the conversion rate under certain circumstances.

The closing of the transaction is expected to occur on April 17.

XMS Capital Partners LLC is the sole placement agent.

K&L Gates LLP represented Exact Sciences and Kramer Levin Naftalis & Frankel LLP represented the placement agent in the transaction.

Exact Sciences is a Madison, Wis.-based molecular diagnostics company focused on the early detection of colorectal cancer.

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