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