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NEW YORK - Oddity Finance LLC, a subsidiary of consumer tech company ODDITY Tech Ltd. (NASDAQ: ODD), has priced $525 million in exchangeable senior notes due in 2030. This private placement targets qualified institutional buyers and marks an increase from the initially proposed $350 million offering. The company, currently valued at $3.9 billion, has demonstrated strong financial performance with impressive gross profit margins of 73% and robust revenue growth of 27% over the last twelve months. According to InvestingPro analysis, which offers 17+ additional investment insights, the stock appears to be trading above its Fair Value.
The notes, set to mature on June 15, 2030, will not bear regular interest, and their principal amount will not accrete. The offering is anticipated to close on June 12, 2025, with expected net proceeds of $510.6 million after initial discounts but before estimated offering expenses, assuming no additional notes are purchased. The company maintains a strong financial position with a current ratio of 1.86 and minimal debt-to-equity ratio of 0.07, reflecting solid balance sheet management.
ODDITY intends to allocate the proceeds for general corporate purposes, with approximately $55.3 million earmarked for capped call transactions designed to minimize potential share dilution upon note exchange. These transactions could influence ODDITY’s Class A ordinary shares’ market price, as well as the notes’ trading price.
The notes, exchangeable at an initial rate of 10.8655 Class A ordinary shares per $1,000 principal amount, offer an exchange premium of approximately 32.5% over ODDITY’s last reported share price. The capped call transactions have a cap price of $138.92 per share, a 100% premium over the stock’s pricing day value. The stock has shown strong momentum with a 43% gain over the past six months, despite a recent 10% pullback last week. For detailed valuation metrics and comprehensive analysis, visit InvestingPro, where you’ll find expert insights and the complete Pro Research Report.
ODDITY, with no immediate acquisition plans, may consider strategic mergers and acquisitions in the future. The notes will be guaranteed by ODDITY and its subsidiary, IM Pro Makeup NY L.P.
This move comes as ODDITY reported holding $257 million in cash and an available $200 million credit line as of March 31, 2025. The company, known for leveraging AI to develop beauty and wellness products, has not registered the notes or the shares deliverable upon exchange under the Securities Act or the Investment Company Act, and the notes are subject to transfer restrictions. With an Altman Z-Score of 10.82 indicating strong financial health and cash holdings exceeding total debt, ODDITY maintains a robust financial position. Access the complete financial health analysis and more through InvestingPro’s comprehensive research tools.
The information provided is based on a press release statement from ODDITY Tech Ltd.
In other recent news, Oddity Tech Ltd announced a $350 million notes offering, with the potential for an additional $50 million, aimed at qualified institutional buyers. This move is intended to provide extra capital for future opportunities, although the company has no immediate plans for significant acquisitions. In another development, Citizens JMP analyst Andrew Boone raised the price target for Oddity Tech to $72, citing strong first-quarter results and future revenue growth prospects with the introduction of new brands. Boone maintains a Market Outperform rating, highlighting the company’s consistent performance and potential for revenue acceleration.
Additionally, Oddity Tech’s shares experienced a decline following a block trade involving 5.5 million shares sold by an entity linked to CEO Oran Holtzman. This transaction, meant to increase stock liquidity, did not provide immediate financial benefits to the company. Despite the sale, Holtzman has committed to a one-year lock-up agreement. Meanwhile, JMP Securities reiterated its Market Outperform rating and $66 price target, emphasizing Oddity’s effective marketing strategies and the anticipated launch of new products.
These recent developments reflect Oddity Tech’s strategic initiatives and the market’s response to changes in share ownership and growth potential.
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