Alphatec announces $300M convertible notes offering

CARLSBAD, Calif. - Alphatec Holdings , Inc. (NASDAQ:ATEC), a medical device company focused on spine surgery innovations with a current market capitalization of $1.77 billion, has unveiled plans for a private offering of $300 million in convertible senior notes due 2030 to qualified institutional buyers. The company has shown impressive momentum, with its stock surging over 84% in the past six months. According to InvestingPro analysis, ATEC maintains a healthy financial position with a current ratio of 2.73, indicating strong liquidity. The offering, which is subject to market conditions, also includes an option for the initial purchasers to acquire an additional $50 million in notes within a 13-day period from the issuance date.

The notes, set to mature on March 15, 2030, are senior unsecured obligations of the company and will pay interest semi-annually. Prior to September 17, 2029, conversions are event-contingent, but thereafter, noteholders can convert at will until two trading days before maturity. ATEC may settle conversions with cash, stock, or a mix, at their discretion. The company has demonstrated strong operational performance, achieving revenue growth of 26.81% over the last twelve months, with an impressive gross margin of 69.37%. Discover more detailed financial metrics and 8 additional key insights with a subscription to InvestingPro.

ATEC reserves the right to redeem the notes wholly or partially for cash from March 20, 2028, until 60 days before maturity, under certain conditions. Additionally, if a "fundamental change" occurs, noteholders may require ATEC to repurchase their notes at the principal amount plus accrued interest.

In tandem with the note pricing, ATEC plans to enter capped call transactions to mitigate potential stock dilution from note conversions or to cover cash payments above the principal amount of converted notes. The initial note purchasers or their affiliates may adjust their hedges, which could influence ATEC’s common stock or note prices.

Proceeds from the offering will fund the capped call transactions, repurchase and cancel some of ATEC’s existing 0.75% convertible senior notes due 2026, and support general corporate purposes. While the company’s EBITDA remains negative at -$44.49 million, two analysts have recently revised their earnings estimates upward for the upcoming period, as reported by InvestingPro. Access the comprehensive Pro Research Report, available for ATEC and 1,400+ other US stocks, to gain deeper insights into the company’s financial health and growth prospects. If additional notes are purchased, ATEC intends to use part of the proceeds for further capped call transactions.

The notes are available only to qualified institutional buyers under Rule 144A of the Securities Act, without registration under the Securities Act or other securities laws. This press release is not an offer to sell or a solicitation to buy these securities.

ATEC’s subsidiaries, Alphatec Spine, Inc., EOS imaging S.A.S., and SafeOp Surgical, Inc., aim to set the standard in spine surgery through their Organic Innovation Machine and AlphaInformatiX Platform.

This press release, based on a statement from ATEC, contains forward-looking projections subject to various risks and uncertainties, and there is no assurance that the offering will be completed as described or that the net proceeds will be used as intended.

In other recent news, Alphatec Holdings reported its fourth-quarter 2024 earnings, with revenue reaching $177 million, surpassing the expected $170.35 million. This marked a 28% year-over-year growth, driven by strong performances in surgical and EOS revenue streams. Despite this revenue beat, the company missed its earnings per share (EPS) forecast, posting an EPS of -$0.23 compared to the anticipated -$0.05. For 2025, Alphatec has projected a 20% revenue growth, aiming for $732 million, and anticipates positive cash flow with an adjusted EBITDA of $75 million.

TD Cowen reaffirmed its Buy rating for Alphatec, maintaining a price target of $22.50, citing the company’s solid cash management strategies and market share expansion. The firm highlighted Alphatec’s potential to capitalize on disruptions in the spine market and emphasized its strategic focus on the sector. Alphatec’s guidance for 2025 suggests continued growth, supported by key product launches, including navigation robotics expected in the latter half of the year. The company’s commitment to financial health and operational efficiency remains a focal point for investors.

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