JWCA advises TransMedics on its upsized $460 million convertible and capped call transaction

May 2023 | read press release

Transaction Background

TransMedics Group, Inc. (“TMDX”) successfully raised $460mm in its debut offering into the convertible market at attractive terms (1.50% coupon and 32.5% conversion premium).  The Company took advantage of momentum in its stock price and a strong convertible market to raise capital to fund its growth and planned business expansion

TMDX engaged J. Wood Capital Advisors to assist in the structuring, negotiation, documentation and execution of the transaction

JWCA provided extensive analysis on deal structuring and related items, including:

• Convertible and derivative overlay structuring

• Syndicate structure and precedent data

• Convertible and capped call documentation to ensure maximum value and future efficiency/flexibility for the company

• Shareholder messaging

JWCA designed and ran a capped call auction process to achieve competitive terms and minimize the upfront cost of the capped call

JWCA provided advice, support and analysis throughout the execution process

Results

TransMedics’ offering was very well received by investors:

• The transaction was multiple times over-subscribed and upsized by $100 million

• The 1.50% coupon priced lower than the 1.75 – 2.25% marketed range and 32.5% conversion premium represented the high end of the marketed range

• The offering attracted demand from large fundamental outright investors, and TransMedics’ stock price traded down only 4.2% during the marketing period.  This compares to an average stock price decline of ~10% for similar sized issuers

• Since 2021, only 7 deals (including TransMedics) have both been upsized and achieved pricing better than the marketed range

Capped call documentation and auction process produced meaningful savings for TransMedics, while maximizing flexibility