Xometry Inc. (NASDAQ:XMTR), renowned for its AI-powered marketplace for on-demand manufacturing services, is set to issue $225 million in Convertible Senior Notes due 2030. This strategic financial move aims to bolster the company’s capital resources and facilitate its growth plans.
These bonds, designed as unsecured obligations of the company, will carry interest payments on a semi-annual basis. Importantly, Xometry is offering initial purchasers the option to buy an additional $25 million in bonds within 13 days from the issuance date, enhancing investment flexibility.
Upon conversion, Xometry has the discretion to settle in cash, Class A common shares, or a combination thereof. The exact interest rate and initial conversion rate are to be determined during the pricing phase.
Xometry plans to allocate the net proceeds towards several strategic initiatives:
Should the additional bond purchase option be exercised, Xometry intends to use the extra funds for further cap-priced option transactions, working capital, and potential acquisitions or strategic investments, though no specific agreements are in place yet.
In conjunction with the notes pricing, Xometry plans to enter into cap-priced option transactions. These are designed to minimize dilution risks from potential note conversions or to offset any excess cash obligations upon conversion. The initial hedging of these options and subsequent market adjustments by option counterparties may impact Xometry’s Class A common shares and bond market prices.
These strategic financial maneuvers, including cap-priced option transactions and share repurchases, are part of Xometry’s efforts to manage its capital structure and protect shareholder value amidst increased debt levels.
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