REDWOOD CITY, Calif.,
April 1, 2020 /PRNewswire/
-- Nevro Corp. ("Nevro") (NYSE: NVRO), a global medical
device company that is providing innovative, evidence-based
solutions for the treatment of chronic pain, today announced that
it has commenced a proposed underwritten public offering of
1,625,000 shares of its common stock (the "common stock offering")
and $165,000,000 aggregate principal
amount of its convertible senior notes due 2025 (the "notes") (the
"notes offering"). All of the shares of common stock to be sold in
the common stock offering will be offered by Nevro. In addition,
Nevro expects to grant the underwriters of the offerings a 30-day
option to purchase an additional (a) 243,750 shares of its common
stock at the public offering price, less underwriting discounts and
commissions and (b) $24,750,000
aggregate principal amount of the notes, less underwriting
discounts and commissions and solely to cover over-allotments with
respect to the notes offering. Neither the completion of the common
stock offering nor the notes offering is contingent on the
completion of the other. The offerings are subject to market and
other conditions, and there can be no assurance as to whether or
when the offerings may be completed, or as to the actual size or
terms of the offerings.
The notes will be senior, unsecured obligations of Nevro,
bearing interest semi-annually and are expected to mature on
April 1, 2025, unless earlier
converted or repurchased. Prior to the close of business on the
business day immediately preceding October
1, 2024, the notes will be convertible at the option of
holders only in certain circumstances and during certain periods,
and thereafter, the notes will be convertible at any time until the
close of business on the second scheduled trading day immediately
preceding the maturity date, in either case into cash, shares of
Nevro's common stock or a combination thereof, at Nevro's election.
Holders of the notes will have the right to require Nevro to
repurchase all or any portion of their notes at 100% of their
principal amount, plus any accrued and unpaid interest to, but
excluding, the fundamental change repurchase date, upon the
occurrence of certain fundamental changes. The interest rate,
conversion rate and other terms of the notes will be determined at
the time of pricing of the notes offering.
In connection with the offering of the notes, Nevro expects to
enter into privately-negotiated convertible note hedge transactions
with one or more of the underwriters and/or their respective
affiliates and/or other financial institutions (the "option
counterparties"). These transactions will cover, subject to
customary anti-dilution adjustments, the number of shares of
Nevro's common stock that will initially underlie the notes, and
are expected generally to reduce the potential equity dilution,
and/or offset any cash payments in excess of the principal amount
due, as the case may be, upon conversion of the notes.
Nevro also expects to enter into separate, privately-negotiated
warrant transactions with the option counterparties at a higher
strike price relating to the same number of shares of Nevro's
common stock, subject to customary anti-dilution adjustments,
pursuant to which Nevro will sell warrants to the option
counterparties. The warrants could have a dilutive effect on
Nevro's common stock to the extent that the price of Nevro's common
stock exceeds the strike price of those warrants.
If the underwriters exercise their option to purchase additional
notes, Nevro expects to enter into additional convertible note
hedge transactions and additional warrant transactions with the
option counterparties, which will initially cover the number of
shares of Nevro's common stock that will initially underlie the
additional notes sold to the underwriters.
Morgan Stanley is acting as bookrunning manager for the
offerings.
Nevro has been advised that in connection with establishing
their initial hedges of the convertible note hedge and warrant
transactions, the option counterparties or their respective
affiliates expect to enter into various derivative transactions
with respect to Nevro'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 Nevro's
common stock or the notes at that time. The option counterparties
or their respective affiliates may modify their hedge positions by
entering into or unwinding various derivatives with respect to
Nevro's common stock and/or purchasing or selling Nevro's common
stock or other securities of Nevro in secondary market transactions
following the pricing of the notes and prior to maturity of the
notes (and are likely to do so during any observation period
related to a conversion of the notes).
The potential effect, if any, of these transactions and
activities on the market price of Nevro's common stock or the notes
will depend in part on market conditions and cannot be ascertained
at this time, but any of these activities could adversely affect
the value of Nevro's common stock, which could affect the ability
to convert the notes, the value of the notes and the amount of
cash, if any, and the number of and value of the shares of Nevro's
common stock, if any, holders would receive upon conversion of the
notes.
Nevro intends to use a portion of the net proceeds from the
common stock offering and notes offering to pay the cost of the
convertible note hedge transactions (after such cost is partially
offset by the proceeds to Nevro from the sale of the warrants).
Nevro expects to use the remainder of the net proceeds from the
common stock offering and notes offering for general corporate
purposes, including to repurchase and retire its outstanding 1.75%
senior convertible notes due 2021 (the "existing convertible
notes") in separate, privately negotiated transactions effected by
one or more of the underwriters or their affiliates concurrently
with these offerings. If the underwriters exercise their option to
purchase additional notes, then Nevro intends to use a portion of
the net proceeds from the sale of additional notes, together with
the proceeds from the sale of additional warrants, to enter into
additional convertible note hedge transactions with the option
counterparties and Nevro intends to use the remaining net proceeds
from the sale of such additional notes for general corporate
purposes and/or the repurchase or other retirement of additional
existing convertible notes.
In connection with the issuance of the existing convertible
notes, Nevro entered into convertible note hedge transactions (the
"existing convertible note hedge transactions") and warrant
transactions (the "existing warrant transactions" and, together
with the existing convertible note hedge transactions, the
"existing call spread transactions") with certain financial
institutions (the "existing option counterparties"). In connection
with Nevro's intended repurchase of the existing convertible notes,
Nevro expects to enter into agreements with the existing option
counterparties to terminate a portion of such existing call spread
transactions, in each case, in a notional amount corresponding to
the amount of such existing convertible notes repurchased, if any.
In connection with any termination of existing call spread
transactions and the related unwinding of the existing hedge
position of the existing option counterparties with respect to such
transactions, such existing option counterparties and/or their
respective affiliates will sell shares of Nevro's common stock in
secondary market transactions, and/or enter into or unwind various
derivative transactions with respect to Nevro's common stock. In
particular, in connection with Nevro's intended repurchase of the
existing convertible notes concurrently with the offerings, Nevro
will terminate a corresponding portion of the existing call spread
transactions, and Nevro expects the existing option counterparties
to sell shares of Nevro's common stock in the open market for some
period of time beginning as early as five scheduled trading days
after the offerings. This activity could decrease (or reduce the
size of any increase in) the market price of Nevro's common stock
at that time and it could decrease (or reduce the size of any
increase in) the market value of the notes. Nevro may enter into
further agreements with the existing option counterparties to
terminate any remaining portion of the existing call spread
transactions in connection with any subsequent repurchase of its
existing convertible notes.
Nevro also expects that those holders of the existing
convertible notes that sell their existing convertible notes to
Nevro may enter into or unwind various derivatives with respect to
Nevro's common stock and/or purchase or sell shares of Nevro's
common stock in the market to hedge their exposure in connection
with these transactions. In particular, Nevro expects that many
holders of the existing convertible notes employ a convertible
arbitrage strategy with respect to the existing convertible notes
and have a short position with respect to Nevro's common stock that
they would close, through purchases of Nevro's common stock, in
connection with Nevro's repurchase of their existing convertible
notes. This activity could increase (or reduce the size of any
decrease in) the market price of Nevro's common stock or the notes
at that time.
The common stock offering and the notes offering will be made
pursuant to an automatic shelf registration statement on Form S-3
(including a base prospectus) filed with the Securities and
Exchange Commission ("SEC"), which automatically became effective.
Preliminary prospectus supplements related to each of the common
stock offering and the notes offering (together with such base
prospectus, each a "prospectus"), will be available on the SEC's
website located at www.sec.gov. Copies of the prospectus relating
to the common stock offering and the notes offering may be
obtained, when available, from: Morgan Stanley & Co.
LLC, Attention: Prospectus Department, 180 Varick Street, 2nd
Floor, New York, NY 10014.
This press release shall not constitute an offer to sell, or the
solicitation of an offer to buy, nor shall there be any sale of,
these securities in any state or jurisdiction in which such offer,
solicitation, or sale would be unlawful prior to the registration
or qualification under the securities laws of any such state or
jurisdiction.
About Nevro
Headquartered in Redwood City,
California, Nevro is a global medical device company focused
on providing innovative products that improve the quality of life
of patients suffering from debilitating chronic pain. Nevro
has developed and commercialized the Senza spinal cord stimulation
(SCS) system, an evidence-based, non-pharmacologic neuromodulation
platform for the treatment of chronic pain. HF10 therapy has
demonstrated the ability to reduce or eliminate opioids in ≥65% of
patients across six peer-reviewed clinical studies. The
Senza® System, Senza II™ System, and the
Senza® Omnia™ System are the only SCS systems that
deliver Nevro's proprietary HF10® therapy. Senza, Senza
II, Senza Omnia, HF10, Nevro and the Nevro logo are trademarks of
Nevro Corp.
To learn more about Nevro, connect with us on LinkedIn, Twitter,
Facebook and Instagram.
Investor Relations:
Juliet Cunningham
Vice President, Investor Relations
+1 650-433-3247
ir@nevro.com
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SOURCE Nevro Corp.