Sidley represented Outset Medical, Inc. in connection with the issuance and sale of an aggregate of 843,908 shares of its Series A Non-Voting Convertible Preferred Stock at a price of US$200.00 per share. Subject to Outset stockholder approval and beneficial ownership limitations, each share of Series A Non-Voting Convertible Preferred Stock will automatically convert to 250 shares of common stock for an aggregate of 210,977,000 shares of common stock. The gross proceeds to Outset from the private placement are US$168.8 million. An additional US$3.9 million, for 19,432 shares of Series A Non-Voting Convertible Preferred Stock, will be invested by certain members of the board and management upon shareholder approval.
Additionally, Outset has entered into a credit agreement and guaranty with a fund managed by Perceptive Advisors, which will provide a US$100 million five-year term loan at closing and an additional term loan of up to US$25 million at the company’s election, in each case, subject to the satisfaction of customary closing conditions, and in the case of the delayed draw term loan, meeting a specified revenue milestone. At closing, Outset expects to use the proceeds of the initial term loan, together with cash on hand, to repay in full all amounts due under Outset’s existing credit facilities that were set to mature in 2027.
The private placement financing was led by PFM Health Sciences, LP and Perceptive Advisors and includes new and existing investors with participation from funds, and accounts advised by T. Rowe Price Investment Management, Inc. as well as institutional investors including Durable Capital Partners LP, healthcare sector specialist funds and multiple other large mutual funds.
Outset Medical, Inc. is a medical technology company pioneering a first-of-its-kind technology to reduce the cost and complexity of dialysis.
For additional information, please refer to the press release.
The Sidley team was led by Frank Rahmani (Capital Markets, Emerging Companies and Venture Capital) and Robert Ryan (Capital Markets) and included Nick DeAngelis and Jake Funk (M&A) and Nicole Garrett and law clerk JP Shaw (Capital Markets). Additional team members included Beth Berg and Daniel Belke (M&A), Sam Newman and Margaret Alden (Restructuring), Sara Brody and Jaime Bartlett (Securities and Shareholder Litigation), Istvan Hajdu and Hana Lee (Capital Markets), and Eric Winwood (Employee Benefits and Executive Compensation).
