K2M prices private offering at $65M: 5 things to know

Spinal Tech

K2M priced a private offering of $65 million to be sold to qualified buyers.


Here are five things to know:

1. The offering of $65 million aggregate principal amount of 3 percent convertible notes will be due 2025; the notes will pay cash interest semi-annually on June 30 and Dec. 30, at a 3 percent rate per year. The payment would commence Dec. 30, 2018, and mature June 30, 2025, barring earlier conversion, redemption or repurchase.

2. The notes will be converted based on an initial conversion rate of 35.2930 shares of K2M common stock per $1,000 principal amount of notes, or the equivalent to initial conversion price of around $28.33.

3. The company plans to use net proceeds from the offering to repay around $18 million previously borrowed under their revolving credit facility; the remaining funds are slated for general corporate purchases which could include working capital, inventor or continued distribution channel expansion.

4. In the first quarter of 2018, K2M reported $67.9 million in revenue, up 10 percent year-over-year. However, the company also reported an $11.4 million net loss and adjusted EBITDA loss of $3 million.

"We have increased our fiscal year 2018 revenue guidance expectations to a new range of $283 million to $287 million based on our improved revenue outlook for Spain," said Chairman, President and CEO Eric Major. "We remain confident in our ability to drive above-market growth in the U.S., fueled by our continued focus on leading the spine market by introducing new and innovative spinal implant solutions to help surgeons care for patients around the world who suffer from debilitating spinal pathologies."

5. In May, K2M released its first-to-market 3D printed expandable interbody Mojave PL 3D expandable featuring Lamellar 3D Titanium Technology.

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