- Tempus AI, Inc. (TEM, Financial) plans to offer $400 million in Convertible Senior Notes due in 2030.
- The proceeds aim to repay $274.7 million in outstanding senior secured term loans and reduce interest expenses.
- Additional funds will be utilized for capped call transactions to minimize potential dilution and for strategic investments.
Tempus AI, Inc. (TEM), a leading technology company in the AI-driven precision medicine sector, has announced a proposed private placement offering of $400 million in aggregate principal amount of Convertible Senior Notes due 2030. The offering is aimed at qualified institutional buyers under Rule 144A of the Securities Act of 1933. Tempus has also granted the initial purchasers an over-allotment option, allowing them to buy an additional $60 million of Notes.
The proceeds from the offering will be used to repay $274.7 million principal amount of its outstanding senior secured term loans, reducing interest expenses and enhancing financial flexibility for Tempus. Part of the proceeds will also fund capped call transactions to decrease potential dilution effects, with remaining funds earmarked for general corporate purposes, including possible acquisitions or strategic investments.
The Convertible Notes will accrue interest semiannually and mature on July 15, 2030. Tempus retains the flexibility to pay off these Notes using cash, shares of its Class A common stock, or a combination of both. The terms, including interest and conversion rates, will be determined upon pricing of the offering.
Tempus is also entering into capped call transactions with its option counterparties, which are expected to mitigate the potential dilutive effect on its Class A common stock. This strategic financial maneuver aims to strengthen Tempus' financial position and market reach, making it more resilient to future market fluctuations and operational needs.
