Cutera, Inc. Announces Pricing of Offering of $125 Million of Convertible Senior Notes
March 05 2021 - 7:01AM
Business Wire
Cutera, Inc. (NASDAQ: CUTR), a leading provider of laser and
other energy-based aesthetic systems for practitioners worldwide,
today announced the pricing of $125 million aggregate principal
amount of 2.25% convertible senior notes due 2026 (the “notes”) in
a private placement to qualified institutional buyers pursuant to
Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”). Cutera also granted the initial purchasers of
the notes an option to purchase up to an additional $13.25 million
aggregate principal amount of the notes. The sale of the notes is
expected to close on March 9, 2021, subject to customary closing
conditions.
The notes will be general senior, unsecured obligations of
Cutera, will not bear regular interest, and the principal amount of
the notes will not accrete. The notes will mature on March 15,
2026, unless earlier converted, repurchased or redeemed. The
initial conversion rate will be 30.1427 shares of Cutera’s common
stock (“common stock”) per $1,000 principal amount of notes
(equivalent to an initial conversion price of approximately $33.18
per share of common stock). The initial conversion price of the
notes represents a premium of approximately 27.5% over the last
reported sale price of Cutera’s common stock on Nasdaq Global
Select Market on March 4, 2021. The notes will be convertible into
cash, shares of Cutera’s common stock or a combination of cash and
shares of Cutera’s common stock, at Cutera’s election.
Cutera may redeem the notes, at its option, on or after March
20, 2024, if the last reported sale price of Cutera’s common stock
has been at least 130% of the conversion price then in effect for
at least 20 trading days (whether or not consecutive) during any 30
consecutive trading day period (including the last trading day of
such period) ending on and including the trading day immediately
preceding the date on which Cutera provides notice of redemption at
a redemption price equal to 100% of the principal amount of the
notes to be redeemed, plus accrued and unpaid special interest to,
but excluding, the redemption date.
If a “fundamental change” (as defined in the indenture governing
the notes) occurs at any time prior to the maturity date, holders
of the notes may require Cutera to repurchase for cash all or any
portion of their notes at a repurchase price equal to 100% of the
principal amount of the notes to be repurchased, plus any accrued
and unpaid special interest. In addition, following certain
corporate events or if Cutera issues a notice of redemption, Cutera
will, under certain circumstances, increase the conversion rate for
holders who convert their notes in connection with such corporate
event or during a redemption period.
Cutera estimates that the net proceeds from the offering will be
approximately $120.7 million (or approximately $133.5 million if
the initial purchasers exercise their option to purchase additional
notes in full), after deducting the initial purchasers’ discounts
and estimated offering expenses payable by Cutera. Cutera intends
to use approximately $14.6 million of the net proceeds to pay the
cost of the capped call transactions described below and the
remainder of the net proceeds for general corporate purposes, which
may include working capital, capital expenditures and potential
acquisitions and strategic transactions.
In connection with the pricing of the notes, Cutera entered into
capped call transactions with certain financial institutions (the
“option counterparties”). The capped call transactions are expected
generally to reduce potential dilution to Cutera’s common stock
upon any conversion of notes, with such reduction subject to a cap
initially equal to approximately $45.54 (which represents a premium
of approximately 75% over the last reported sale price of Cutera’s
common stock on Nasdaq Global Select Market on March 4, 2021), and
is subject to certain adjustments under the terms of the capped
call transactions. If the initial purchasers exercise their option
to purchase additional notes, Cutera expects to enter into
additional capped call transactions with the option
counterparties.
Cutera expects that, in connection with establishing their
initial hedges of the capped call transactions, the option
counterparties or their respective affiliates may enter into
various derivative transactions with respect to Cutera’s common
stock and/or purchase shares of Cutera’s common stock concurrently
with or shortly after the pricing of the notes. This activity could
increase (or reduce the size of any decrease in) the market price
of Cutera’s common stock or the notes at that time.
In addition, Cutera expects that the option counterparties or
their respective affiliates may modify their hedge positions by
entering into or unwinding various derivatives with respect to
Cutera’s common stock and/or purchasing or selling Cutera’s common
stock or other securities of Cutera in secondary market
transactions following the pricing of the notes and prior to the
maturity of the notes (and are likely to do so on each exercise
date for the capped call transactions). This activity could also
cause or prevent an increase or a decrease in the market price of
Cutera’s common stock or the notes, and to the extent the activity
occurs during any observation period related to a conversion of
notes, this could affect the value of the consideration that a
noteholder will receive upon conversion of its notes.
Neither the notes, nor any shares of Cutera’s common stock
potentially issuable upon conversion of the notes, have been, nor
will be, registered under the Securities Act or any state
securities laws and, unless so registered, may not be offered or
sold in the United States absent registration or an applicable
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other
applicable securities laws.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any securities, nor shall it
constitute an offer, solicitation or sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction.
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version on businesswire.com: https://www.businesswire.com/news/home/20210305005223/en/
Investor Relations: Anne Werdan +1 415-657-5500
awerdan@cutera.com
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