8-KMaterial AgreementsFinancial EventsSecurities & Listing+2

DEXCOM INC 8-K Report, Material Agreement (Dec 3, 2018)

Filed December 3, 2018For Securities:DXCM

Summary

DexCom, Inc. (DXCM) announced on December 3, 2018, the completion of a significant capital raise through the sale of $850.0 million in aggregate principal amount of 0.75% Convertible Senior Notes due 2023. This offering, which included the full exercise of an option for an additional $100.0 million, generated net proceeds of approximately $836.0 million. A substantial portion of these proceeds was strategically allocated to concurrent transactions: $35.1 million for convertible note hedge transactions designed to mitigate dilution, and $100.0 million for a share repurchase program. The remaining net proceeds are earmarked for capital expenditures, working capital, and general corporate purposes, with flexibility for potential in-licensing, acquisitions, or further share repurchases. This move strengthens DexCom's financial position, providing resources for growth initiatives and operational needs while demonstrating management's commitment to shareholder value through the buyback program.

Key Highlights

  • 1Completed a private placement of $850.0 million in 0.75% Convertible Senior Notes due 2023, with an additional $100.0 million option exercised, totaling $950.0 million in gross proceeds.
  • 2Estimated net proceeds from the offering are approximately $836.0 million after deducting discounts and expenses.
  • 3Used $35.1 million of net proceeds to fund convertible note hedge transactions to mitigate potential dilution from note conversions.
  • 4Used $100.0 million of net proceeds to repurchase shares of the Company's common stock concurrently with the offering.
  • 5The remaining net proceeds are intended for capital expenditures, working capital, and general corporate purposes, including potential acquisitions or further share repurchases.
  • 6The Notes are unsecured and unsubordinated, bear a 0.75% annual interest rate, and mature on December 1, 2023, with redemption options available after December 1, 2021.
  • 7The Notes are convertible into cash, shares of Common Stock, or a combination thereof, at the Company's election, with an initial conversion price of approximately $164.29 per share.

Frequently Asked Questions

This 8-K filing reports on the completion of DexCom's private placement of $850.0 million in convertible senior notes due 2023, and the associated transactions, including the use of proceeds.

DexCom raised approximately $836.0 million in net proceeds from the sale of convertible senior notes. These proceeds were used for convertible note hedge transactions ($35.1 million), share repurchases ($100.0 million), and the remainder for capital expenditures, working capital, general corporate purposes, and potential strategic investments.

The notes have a principal amount of $850.0 million (plus an additional $100.0 million exercised option), carry a 0.75% annual interest rate, mature on December 1, 2023, and are convertible into DexCom's common stock at an initial conversion price of approximately $164.29 per share, subject to adjustments and certain conversion conditions.

DexCom entered into convertible note hedge transactions concurrently with the note offering. These transactions are intended to reduce potential dilution to common stockholders and offset any cash payments exceeding the principal amount upon conversion of the notes.