Orthovita to Raise $23 Million
BY JOHN MCCORMICK, NOVEMBER 17, 2006
This morning Orthovita announced that it hopes to do a 7.7 million share offering at $3.25 a share in order to raise approximately $23 million net of fees.
At least $9 million of the proceeds is expected to be used to buy out the Angiotech profit-sharing royalty rights for VITAGEL(TM) and CELLPAKER Collection Device. This purchase has been memorialized in a pre-existing binding letter of intent. The remaining $14 million or so is expected to be used for running the business and expanding manufacturing capacity.
Orthovita noted in its press release that it has given underwriters a 30-day option to buy an additional 1.2 million shares of common stock to cover over-allotments, if any.
According to its latest 10-Q filing, Orthovita currently has 52.5 million shares issued and outstanding. After the offering it would have about 60.2 million shares outstanding so investors in this offering would be buying about 12.7% of the company at a 15% discount to yesterday's closing price.
