NeoGenomics talks $150 million five-year convertible notes to yield 1.25%-1.75%, up 25%-30%

By Abigail W. Adams

Portland, Me., April 29 – NeoGenomics Inc. plans to price $150 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 1.25% to 1.75% and an initial conversion premium of 25% to 30%, according to a market source.

Morgan Stanley & Co. LLC, BofA Securities Inc. and SVB Leerink are joint bookrunners for the registered offering, which carries a greenshoe of $22.5 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

They are putable upon a fundamental change.

The notes are contingently convertible until Feb. 1, 2025.

There is standard dividend protection.

The notes will be settled in cash, shares or a combination of both at the company’s option.

Concurrently with the convertible notes offering, the company will price a secondary offering of $100 million in common stock with talk for a reoffer price of $28.25 to $29.25.

The secondary offering carries a greenshoe of $15 million.

Underwriters of the secondary offering are also offering up to $40 million of borrowed shares to facilitate the hedging transactions of purchasers of the convertible notes.

Proceeds will be used for general corporate purposes, to repay borrowings under its term loan facility, and the potential acquisition or investment in complimentary businesses or technologies.

NeoGenomics is a Fort Myers, Fla.-based cancer genetics testing company.

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