Outset Medical, a US-based dialysis system provider backed by medical device manufacturer Baxter International, is going public today in an initial public offering sized at approximately $242m.
The IPO will consist of 8.95 million shares issued on the Nasdaq Global Select Market and priced at $27.00 each, above the $22 to $24 range the company had set. It also increased the number of shares in the offering from 7.6 million, and the price values it at about $1.1bn.
Originally founded as Home Dialysis Plus in 2003 before relaunching under a new name in 2010, Outset has created a haemodialysis system called Tablo which only requires an electrical outlet and tap water to perform kidney dialysis.
About 70% of the IPO proceeds have been earmarked for increasing the size of the company’s sales and support resources while the rest is set to go to research and development.
Outset had raised $434m prior to the offering, including $132m in an August 2018 series D round featuring Baxter’s strategic investment vehicle, Baxter Ventures.
The round was led by Mubadala and included financial services group Fidelity and fellow existing backers Partner Fund Management, Warburg Pincus and Perceptive Advisors as well as funds advised by T. Rowe Price.
D1 Capital Partners led the company’s $125m series E round in February this year, investing with Fidelity, Partner Fund Management, Perceptive Advisors and funds advised by T. Rowe Price. Outset’s earlier investors include Vertical Group.
Outset’s largest shareholders are Warburg Pincus, owner of a 21.8% stake post-IPO, Fidelity (11.5%), D1 Capital (9.3%), T. Rowe Price (9%), Mubadala vehicle Aurora Investment (7%), Partner Fund Management (5.8%) and Perceptive Advisors (5%).
BofA Securities, Morgan Stanley and Goldman Sachs are joint lead book-running managers for the offering while SVB Leerink and Stifel are co-managers. They have the 30-day option to acquire up to 1.34 million additional shares which would lift the size of the offering to $278m.
