Tempus AI to Offer $400M in Convertible Senior Notes

By Philip Seaworth • Saturday, July 05 15:22 • Permanent Link

Tempus AI, Inc. has announced its plan to offer $400 million in convertible senior notes due in 2030 in a private placement, with an option for initial purchasers to buy an additional $60 million. The notes will be general unsecured obligations, accruing interest payable semiannually in arrears and maturing on July 15, 2030, unless earlier converted, redeemed, or repurchased.

The company expects to use the net proceeds to repay $274.7 million in outstanding senior secured term loans, pay for capped call transactions, and for general corporate purposes, including potential acquisitions or strategic investments in complementary businesses or technologies, working capital, operating expenses, capital expenditures, or repayment of additional indebtedness.

In connection with the pricing of the notes, Tempus intends to enter into privately negotiated capped call transactions to cover the number of shares of its Class A common stock initially underlying the notes, aiming to reduce potential dilution to the stock upon conversion of notes and/or offset any cash payments in excess of the principal amount of converted notes.

The notes and any shares of Class A common stock issuable upon conversion of the notes have not been and will not be registered under the securities laws, necessitating an applicable exemption from registration requirements for their offer or sale in the United States.

As of the previous financial period, Tempus had outstanding term loans amounting to $275 million and is now seeking to repay $274.7 million of these loans with the net proceeds from the offering, thereby reducing its interest expense and enhancing financial flexibility.

Tempus is a technology company that uses artificial intelligence in healthcare to provide AI-enabled precision medicine solutions to physicians and facilitate the discovery, development, and delivery of optimal therapeutics. The market has reacted to these announcements by moving the company's shares 3.02% to a price of $60.97. For the full picture, make sure to review Tempus AI's 8-K report.

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