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JWCA advises pacific biosciences of california on its $900 million private convertible investment from sb northstar lp, a subsidiary of softbank group corp.

february 2021 | read press release

Transaction Background

Pacific Biosciences of California, Inc. (“PacBio” or the “company”) successfully raised $900mm in the private convertible market from Softbank with use of proceeds to support the Company’s growth initiatives

PacBio’s objectives included:

  • Minimizing market and stock price risk

  • Partnering with a strategic investor for long-term growth

The company engaged J. Wood Capital Advisors, LLC (“JWCA”) to assist in the structuring, negotiation, documentation, and execution of this transaction

JWCA provided analysis to the company on deal structuring and related items, including:

  • Convertible structuring: redemption options and implications on overall economics

  • Convertible valuation analysis

  • Provisional call and make-whole mechanics

  • Precedent private convertible investment terms and conditions

  • Comparison with publicly marketed 144A convertible alternative

  • Accounting implications, including the impact of early adoption of new accounting rules

  • Shareholder messaging

JWCA provided advice, support, and analysis throughout the execution process

Results

JWCA provided advice, support, and analysis throughout the execution process

  • PacBio’s stock was up 16.1% on the day of the announcement

The strategic investment of $900mm from Softbank provides PacBio with a long-term strategic investor that will enable the company to further accelerate its growth strategies

The convertible investment allows Softbank to participate in the upside in PacBio common stock above $43.50 per share, which represents a 10% premium to the Company’s closing price on February 9, 2021 and a 30% premium to the Company’s average 30-day trailing closing price of $33.56. The $900mm convertible investment with $43.50 per share conversion price has approximately 20.7mm underlying shares which is 6.1mm shares lower in equity dilution than a $900mm investment in the company at $33.56. 6.1mm shares represents approximately 3.2% of PacBio 193.1mm outstanding common shares