Alphatec ticks down after convertible offering hiked to $350 mln

Atec Co

05/03/2025 16:26

** Shares of medical device firm Alphatec Holdings ATEC.O down 0.4% at $11.68 on Weds after securing capital raise to refinance near-term convertible bonds (CBs)

** Spinal surgery imaging provider late Tues announced pricing $350 mln 0.75% 5-yr convertible bonds

** Deal size increased from $300 mln

** Initial conversion price of $15.54 represents 32.5% premium to stock's last close, while capped call price of $23.46 is double Tuesday's last sale

** Co plans to use $36.7 mln of net proceeds to pay for capped calls, $268.4 mln to repurchase $253 mln of its outstanding 0.75% CBs due 2026

** Carlsbad, California-based firm has ~$1.7 bln market cap, per LSEG data

** Last Thurs, ATEC shares rose nearly 10% after co reported Q4 rev of $177 mln, up 28% y/y, topping consensus est. of ~$172.5 mln, and reaffirmed 2025 rev guidance of ~$732 mln

** With move on the session, stock up ~27% YTD following 39% drop in 2024

** Of 12 analysts covering ATEC, recommendation breakdown is 11 "strong buy" or "buy" and 1 "hold"; median PT of $18.92 implies >60% upside to current levels

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))