Onward Medical, a Dutch medical technology company, launched a capital increase on Tuesday night to raise about €40m by way of a private placement. The price of the new shares will be determined after a one day bookbuild.
The company has hired UBS and Bryan Garnier as global coordinators. Bank Degroof Petercam is the bookrunner.
The deal began at 5.45pm Netherlands time on Tuesday night after the market closed. The shares had closed at €5.72 on the Euronext Amsterdam, valuing the company at €195.9m.
Given the market cap, a €40m deal implies a 20.4% capital increase and the issuance of about 7.1m new shares.
The bookrunners have structured the capital increase to consist of a one day bookbuild, starting on Tuesday after the close and ending on Wednesday after the market close, “to allow a broader investor base to participate,” said the company in a press release on Tuesday evening.
The deal is expected to be priced before the market open on Thursday.
The shares have been suspended from trading during the bookbuilding period, and following the capital increase, the new shares are expected to be listed and admitted to trading on October 28.
The deal was launched with an announcement that Ottobock, the UK medical equipment manufacturer, would come into the deal as a cornerstone investor. It has committed to buying €22.5m of the trade, guaranteeing 56.25% of the deal.
An agreement between Ottobock and Onward Medical also says that the two may enter into a long-term commercial collaboration following the capital increase.
Onward Medical will use 40% of the proceeds to fund research and development, including clinical studies and regulatory activities for its ARC-EX System, a system to improve hand and arm function, ARC-IM, its system for blood pressure regulation, and ARC-BCI, another system to restore movement.
Another 30% will be used for the commercial launch of the ARC-EX System in the US over the next few months. Twenty percent of the proceeds will be allocated to building operations and for administrative needs, 5% to fund working capital requirements, and another 5% to pay off debt.
The net proceeds are expected to provide the company with a cash runway for two years.
Onward Medical, Ottobock, and certain members of the management and the board of directors have agreed not to sell more shares for 180 days after the deal.