SeaSpine Holdings Prices 4.5M Public Offering At $19.50 Per Share

SeaSpine Holdings, a surgical solutions provider for the treatment of spinal disorders, has priced its public offering of 4.5 million shares of its common stock at a price of $19.50 per share. The gross proceeds from the public offering are expected to be $87.8 million and the offering is expected to close on or about April 20.

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SeaSpine Holdings (SPNE) intends to use part of the net proceeds to finance its acquisition of 7D Surgical where SPNE is going to pay $27.5 million in cash for the company. SPNE intends to use the remaining net proceeds for general corporate purposes and working capital.

Lat week, SPNE updated its revenue guidance for FY21. The company expects FY21 revenues of between $200 million and $205 million, a jump of 30% to 33% year-on-year including the acquisition of 7D Surgical that it expects to complete in the second quarter of this year.

SPNE also expects this acquisition to be accretive to EBITDA from 2022 onwards. The company announced the acquisition of 7D Surgical for $110 million in a cash and stock deal late last month. (See SeaSpine Holdings stock analysis on TipRanks)

On April 6, BTIG analyst Ryan Zimmerman raised the price target from $25 to $28 (33.5% upside) and reiterated a Buy rating on the stock. Zimmerman said in a research note, “We think this is a solid beat and not entirely surprising given SPNE’s multiple 1Q21 product launches and that the macro environment (e.g., COVID-related surgery restrictions) continues to improve.”

“Overall, we think preliminary results and upped guidance reflect confidence in the product cadence, SPNE’s ability to take incremental share, and overall market growth, all of which should help SPNE continue to grow at above-market levels,” Zimmerman added.

Consensus among analysts is a Strong Buy based on 7 Buys. The average analyst price target stands at $25.86 and implies upside potential of 23.1% to current levels.

According to TipRanks Smart Score system, SPNE scores a 9 out of 10 indicating that the stock is highly likely to outperform the market.